Schools dodge $19 million budget cut (Enid News)

By Sally Asher

Oklahoma public schools have dodged the $19 million budget cut projected by the state.

State officials found $43.8 million in a dedicated source of income for public schools: the 1017 Fund, or the Education Reform Revolving Fund, according to a Wednesday article in the Tulsa World

Additional funding reduction amounts were supposed to be announced after Oklahoma State Board of Equalization met Tuesday, but the board did not discuss the topic during the meeting, according to the Board of Equalization Fact Sheet for Tuesday’s meeting.

The $43 million had not been included in previous monthly reports that went to the Board of Equalization, said Steffie Corcoran, director of communications for the state Department of Education.

The 1017 Fund, signed into law in 1990 by then-Gov. Henry Bellmon, established a dedicated source of funding for public schools, and is supported by personal and corporate income tax, sales tax, use tax, a portion of cigarette and tobacco tax, and tribal gaming and horse track gambling revenues, according to Oklahoma Policy Institute. 

While this “found money” will keep public schools from suffering the $19 million cut projected by state officials this fiscal year as a result of the state budget shortfall, Corcoran said the 1017 Fund alone won’t save the department from cuts for the next fiscal year that starts July 1.

“This cut won’t happen, but there are other cuts chasing it down the street, if you will,” Corcoran said. “The compounding problem is that we will receive a revenue cut, but we don’t know what yet. We’ve been told on no uncertain terms the general revenue failure will deepen by a certain amount, and neither they nor we know yet.” 

Corcoran added officials will have a better idea of what kind of cuts departments will face by mid-March because OMES is waiting to receive February collections to get the most up-to-date information before determining additional cuts. 

Amber Graham Fitzgerald, Enid Public Schools director of communications, said Wednesday the discovery of the funds is good, but it doesn’t fix the funding issue at hand.

“Although the circumstances surrounding it are hard to understand, we are relieved that the 1017 Fund will not result in an additional cut for the district,” she said. “It is important to note, however, that Oklahoma’s schools still face a budget crisis. EPS already has experienced an $845,000 loss, and we know another general fund reduction is likely this spring and again next fiscal year. While we have done everything possible to protect instruction, it is unreasonable to believe the deficit will not negatively impact the education of students across the state.” 

Corcoran and John Estus, Office of Management and Enterprise Services director of public affairs, released a joint statement Wednesday afternoon concerning the 1017 Fund.

“The Oklahoma State Department of Education and the Office of Management and Enterprise Services are working together regarding the 1017 Fund,” they said. “OSDE and OMES both acknowledge the fund has not yet failed but could fail later if revenues decline dramatically. Superintendent of Public Instruction Joy Hofmeister is less optimistic than OMES that the fund will escape failure this year.” 

There is no “newly found money” in the fund, according to the release.

“Time will determine whether the fund is solvent or fails this fiscal year,” they said in the release. “OSDE and OMES are collaborating to get the best information possible to decision makers in schools and throughout state government in the midst of a significant budget shortfall and ongoing volatility in revenue collections.” 

Shawn Hime, executive director of Oklahoma State School Board Association and former EPS superintendent who previously served as finance director at OSDE, told the Tulsa World it was an “anomaly” that the 1017 Fund was not included in Board of Equalization Reports.

“As 1017 is a revolving fund, I would expect all parties to know about a cash balance and that cash balance to be reported out,” he told the Tulsa World. “It’s interesting that we’ve been talking about this since December and nobody let anyone know. It’s a big surprise we have $43 million sitting in a fund at a time when we are cutting budgets.”

The oversight shows a need for closer scrutiny of the state’s budget practices, Hime said in the Tulsa World’s Wednesday article. 

“It’s very difficult for school boards and school leaders to prepare a budget when we have monthly changes and so much uncertainty,” he said in the article. “I think this is a time for us to take a step back and look at our budgeting process for the future.”

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