Oklahoma revenue crunch colors budget talk (Tulsa World)

By Barbara Hoberock 

Panelists on Thursday outlined a host of budget challenges facing lawmakers when they return in February to the Capitol to craft a budget.

The Oklahoma Policy Institute, a Tulsa-based think tank, hosted the discussion at the Oklahoma History Center.

Finance Secretary Preston Doerflinger said Gov. Mary Fallin will have about $172 million less to craft the fiscal year 2015 budget than was available for the current year. The reduction is not necessarily bad because it will force state officials to focus on priorities, he said.

University of Central Oklahoma Business College Dean Mickey Hepner said revenues could come up short during the current fiscal year, creating a chance for mid-year budget reductions for state agencies.

Within the last 18 months, the state’s economy has been in a holding pattern, Hepner said.

“This is a challenging time for the state economy,” he said.

Hepner said state leaders need to focus on real problems facing its residents, such as education and health care, and quit talking about reducing the state’s income tax, which is already low.

The Oklahoma Supreme Court recently struck down an income tax cut passed last session because it was included with another bill to fund repairs to the Capitol. The court found it was a violation of the state constitutional requirement that bills contain one subject.

Officials must deal with the state’s compensation system for employees before making any changes to pensions, said Sterling Zearley, executive director of the Oklahoma Public Employees Association.

Thousands of state employees have not had a raise in years. Meanwhile, a recently completed study found pay lacking.

Doerflinger said the state needs to consider passing a bond issue to make repairs to the Capitol, but House leaders have been reluctant to take on more debt.

Also, the Oklahoma Health Care Authority, the state’s Medicaid agency, needs $144 million more to keep the program at its current level as a result of a reduction in federal funds and other factors, said Nico Gomez, the agency’s CEO.

“Our budget needs are significant,” he said.

The Department of Corrections is at capacity and has a very poor correctional officer staffing ratio, said Sean Wallace, Oklahoma Corrections Professionals executive director.

“It is scary,” he said. “It is dangerous. It is only getting worse by the day.”

Lawmakers must either work to reduce the prison population growth or rely more heavily on private prisons, Wallace said.

In the long term the state must address sentencing policies, he said.

Meanwhile, the state on an annual basis gives away billions in tax incentives, said House Minority Leader Scott Inman, D-Del City. The state has no way of knowing if the incentives are effective in areas such as job creation, he said.


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