OKPOLICY.ORG
By Rick Green
Oklahoma finance officials, concerned over sagging tax revenues, cut spending so much in recent months that the state will end its fiscal year in two weeks with a cash surplus likely to top $100 million.
That amounts to a rare bit of good news on the state financial front, but it also means painful funding cutbacks were larger than they needed to be, including for agencies serving the mentally ill and the elderly.
Shelly Paulk, deputy budget director, said through 11 months of the fiscal year, the general revenue fund surplus is $166.6 million. Allowing for the possibility of further declines this month, the state will likely end the fiscal year with more than $100 million.
She said the money will likely be returned to state agencies in proportion to how much they were cut during two revenue failures that led to across-the-board spending reductions of 3 percent in December and 4 percent in March.
David Blatt, a spokesman for the Oklahoma Policy Institute, which tracks state spending, said officials acted in good faith but it’s now clear the March cut was larger than needed.
“It turns out some unnecessary pain was inflicted,” he said.
Even after the 3 percent cut in December, the state Board of Equalization projected in February the state was facing a 1.6 percent revenue shortfall.
But the state Office of Management and Enterprise Services decided to do a 4 percent spending cut.
The cut was to annual spending totals for state agencies, but since it had to be absorbed in the tail end of the year, 18 percent monthly reductions were needed.”
The result was felt by the public.
“The Department of Human Services held off making payments to seniors and those with disabilities for three months,” Blatt said. “Mental health’s response to the second revenue failure included limited benefits to over 70,000 Oklahomans with mental illness.”
“Maybe there needs to be another process, safeguard or oversight if the finance secretary can cut more than the Board of Equalization has projected,” Blatt said. “Maybe there is a reform that comes out of this.”
Finance Secretary Preston Doerflinger said Friday it’s premature to talk about the surplus before the fiscal year concludes.
Paulk said the spending cuts were implemented in a responsible fashion at a time when revenues were declining at ever-increasing rates.
“We just felt to be safe, we didn’t feel like we could cut any less,” she said.
There was also a desire to limit the number of spending cuts that would be implemented.
“It’s hard on agencies as well to cut a little here and wait a couple months and cut more and cut more,” Paulk said. “It’s better and easier to take the larger cut and get something back than to miss it on the short side and keep having to pull money as we go through the year.”
http://newsok.com/article/5504907
