Governor Fallin, Legislative Leaders Announce Budget Deal
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May 11, 2011
Press Release
Tuesday, May 10, 2011
Governor Fallin, Legislative Leaders Announce Budget Deal
OKLAHOMA CITY — Governor Mary Fallin, House Speaker Kris Steele and Senate Pro Tempore Brian Bingman today announced a budget agreement laying out a fiscally responsible plan to balance the state budget without raising taxes. Addressing a $500 million shortfall, today’s budget deal relies primarily on targeted budget cuts.
As part of the budget agreement, both the speaker and the pro tem have committed to passing key government modernization bills, including legislation to consolidate several state agencies under the Office of State Finance and legislation to consolidate the state’s Internet Technology services. Both items include projected savings and were included as part of Fallin’s legislative agenda.
Under the proposed FY 2012 budget, cuts to state agencies vary, generally ranging from 1 to 9 percent. Both the governor and legislative leaders made shielding core government functions a priority. For that reason, cuts to the Department of Education (4.1 percent), the Department of Public Safety (4.0 percent) and total spending for Health and Human Services (1.2 percent) are significantly less than cuts to other agencies. Transportation, also identified as a priority, is receiving a 7 percent cut, although the budget proposes a $70 million bond issue that will allow the department to complete its eight year work plan on time.
Governor Fallin said, “At the beginning of this legislative session, I asked lawmakers to send me a plan that accomplishes three things: balance the budget without raising taxes; prioritize spending to protect core government agencies like education, public safety, transportation, and health and human services; and pass legislation that makes our state government smaller, smarter and more efficient.
“This budget accomplishes all of those goals. It makes tough, but realistic spending cuts while shielding government priorities from the highest reductions. Furthermore, I have received a commitment from our legislative leaders that important government modernization efforts will be passed and sent to my desk, so that we can keep our promise to voters to make government operate more effectively.”
Speaker Steele said, “We faced a challenging financial situation again this year, but I am pleased we were able to put our heads together and come up with a balanced budget that protects the core services our citizens expect,” said Steele. “Oklahomans will be pleased with the results this budget will produce.”
Senate Pro Tem Brian Bingman said, “This budget reflects our commitment to fiscal responsibility while preserving core services to the citizens of Oklahoma. We are prioritizing our needs in the areas of public safety, education and transportation funding. I want to thank Governor Fallin and Speaker Steele for their work in this effort, and my Appropriations Chair Senator David Myers for his hard work in leading the Senate budgeting process.”
Other notable items within the budget agreement:
The budget includes three supplementals targeted at higher education, common education and career technology for a total of $21M.
The Department of Corrections receives a cut of only .5 percent, preventing further furloughs
The Human Rights Commission is consolidated into the Attorney General’s Office
ATTACHMENT: FY 2012 Budget Agreement
$6.5 billion Oklahoma budget deal calls for deeper cuts to education
Oklahoma legislators and Gov. Mary Fallin hammer out $6.5 billion deal, which calls for using cash reserves and several revolving funds. Education overall got a 4.7 percent cut, while health and human services were cut 1.2 percent overall.
BY MICHAEL MCNUTT mmcnutt@opubco.com
Published: May 11, 2011
Public schools and higher education will face their biggest cuts in years in a state budget agreement announced Tuesday by legislative leaders and Gov. Mary Fallin.
Budget cuts for agencies range from less than 1 percent to 9 percent as the Republican leadership, who control the Legislature and the governor’s office at the same for the first time in history, wrestled with a $500 million shortfall for the 2012 fiscal year beginning July 1.
House Appropriations and Budget Committee Chairman Earl Sears said leaders aren’t upset with public education.
“It wasn’t that they fell out of favor,” said Sears, R-Bartlesville. “It’s just at this particular time that their cuts were not as small as they have been in the previous years.”
The $6.5 billion package, which has yet to win legislative approval, is 3.2 percent less than this fiscal year’s budget of $6.7 billion.
Unlike last year’s budget framers, legislative leaders and Fallin had no state savings or federal stimulus funds to shore up the budget. State officials last year used about $1.2 billion of one-time funds to balance the current fiscal year budget.
Legislators were authorized to spend $6.3 billion this session, but the agreement includes using about $200 million from cash reserves and various revolving fund accounts to increase the total to $6.5 billion.
State Finance Director Preston Doerflinger said it was unknown how many state jobs could be lost with the cuts.
Public schools are targeted for a 4.1 percent cut, and higher education and CareerTech are to be cut 5.8 percent each.
Plans are to pass legislation this session to provide a one-time allocation of $21 million to public schools, higher education and CareerTech to help make up for the cuts. That action would reduce the cut to public schools to 3.8 percent and cuts to higher education and
CareerTech would end up being cut about 4.8 percent.
“While we are disappointed that higher education will experience a 5.8 percent budget cut with a $10 million supplemental appropriation, we certainly support the agreement announced today by the governor and the House and Senate leadership and thank them for their efforts,” Higher Education Chancellor Glen Johnson said.
Fallin, who has two children in her household in college, said she hopes the higher education cuts won’t translate into tuition increases.
“I’ve asked higher ed, frankly, to help me find ways to make their operations more efficient, more effective,” Fallin said. “That is how you keep from having tuition increases and how we can help minimize the cuts that they will be experiencing.”
Other agencies
• The area of health and human services received a 1.2 percent cut.
• Department of Human Services was cut 1.1 percent.
• Health Department was cut 4.2 percent.
• Mental Health and Substance Abuse Services Department was cut 0.3 percent.
• The Public Safety Department, which includes the Oklahoma Highway Patrol, got a 4
percent cut.
• The Corrections Department received a cut of 0.5 percent. The reduction should prevent further furloughs for prison employees, according to the governor’s office.
• The state Transportation Department received a cut of 7 percent; $100 million will be taken from its revolving fund and transferred to the state’s general revenue fund where it can be used for the state budget. A bill will be introduced to allow the Transportation Department to seek a $70 million bond issue so projects in its eight-year building plan can remain on schedule.
Bill expected this week
House Speaker Kris Steele, R-Shawnee, said the budget will be included in a bill that will be brought up Thursday by a House committee and could be heard on the House floor Friday.
Fallin proposed 3 percent cuts to core agencies of education, transportation, public safety and health and human services in her State of the State message to legislators in early February. She called for 5 percent cuts for most of the other agencies.
It’s no surprise the cuts will be higher than what Fallin suggested. The size of her cuts depended on some ideas she had to raise money and to reduce expenses. Legislators balked at many of them.
The alternative was either bigger agency cuts or tax increases.
Republican legislative leaders and Fallin strongly oppose tax increases.
Fallin said she had assurances from Steele and Senate President Pro Tem Brian Bingman, R-Sapulpa, to keep alive bills this session that would consolidate some agencies and allow others to share information technology services, which could bring about savings.
The budget calls for eliminating the Oklahoma Human Rights Commission. Its $571,258 budget was transferred to the state attorney general’s office, which is taking over the duties of the Human Rights Commission. The attorney general’s office also is taking over state payments of $904,000 to Legal Aid attorneys; while the attorney general’s office reflects an 8.3 percent increase, it actually is a 3 percent decrease, an agency
spokeswoman said.
This fiscal year is the third straight year agencies’ state revenues have come in less than in the previous year as the state deals with an economic slowdown caused largely by the national recession. Some agencies have had their budgets cut by as much as 20 percent during that period.
Legislators must come up with a budget for the upcoming fiscal year before they adjourn.
The session is scheduled to end May 27, but legislators could vote to adjourn earlier if they get their business wrapped up.
Budget proposal’s cuts wide-ranging
by: BARBARA HOBEROCK World Capitol Bureau & WAYNE GREENE World Senior Writer
Wednesday, May 11, 2011
5/11/2011 5:45:59 AM
OKLAHOMA CITY – Gov. Mary Fallin and legislative leaders announced on Tuesday a $6.5 billion 2012 fiscal year budget with cuts to state agencies generally ranging from 1 percent to 9 percent.
“The budget we are looking at today makes some tough decisions but realistic cuts,” Fallin said.
Compared to the fiscal year 2011 budget, the budget proposal is nearly $218 million less – a reduction of 3.2 percent.
Lawmakers tapped revolving funds and cash and are counting on cost-saving measures and a bond issue to make up for the $500 million less the state had to spend in crafting the fiscal year 2012 budget compared to the current budget.
The State Department of Education is taking a 4.1 percent cut but is slated to receive a $10 million supplemental appropriation contingent on legislative approval.
“While a 4.1 percent reduction for education will be challenging, it is less than the cuts that education faced earlier in the legislative session,” said State Superintendent Janet Barresi. “We’re committed to doing everything we can to ensure that the impact of this reduction on school districts is minimized.”
Tulsa Public Schools Superintendent Keith Ballard estimated that the budget cuts would translate into a $5 million cut in funding to the district. That comes on top of a $1.3 million loss when the state failed to honor an obligation to fund teacher health insurance costs and a $20 million cut last year.
“This is a devastating cut from the Legislature that says education is a priority,” Ballard said.
If education really was a priority, the Legislature would have thought twice about allowing a previously passed state income tax cut to go into effect, Ballard said.
The district cut 225 teaching positions last year, he said.
Ballard said he has committed to avoiding layoffs this year, but over the course of time the $6.3 million the district won’t get from the state is the equivalent of 150 teaching positions.
CareerTech is taking a 5.8 percent cut but is slated to get a $1.4 million supplemental appropriation, pending legislative approval.
Phil Berkenbile, Department of Career and Technology Education director, said he was not expecting the level of cuts his agency received, adding that he was very disappointed.
“It means we are going to have to cut back on everything,” Berkenbile said.
He said the agency hopes to avoid layoffs.
Although the agency has been promised a $1.4 million supplemental appropriation, Berkenbile said lawmakers told him that if the measure fails to get the supermajority needed to pass, the supplemental funding will be lost.
Leaders in the House have had trouble mustering support for emergency clauses this year.
Higher Education will take a 5.8 percent cut but is expected to receive a $10 million supplemental appropriation.
Cuts to education were bigger than they have been in prior years, which is unfortunate, said House Appropriations and Budget Committee Chairman Earl Sears, R-Bartlesville. He said lawmakers are working diligently for supplemental appropriations.
The financially strapped Department of Corrections will take a 0.5 percent cut for a loss of slightly more than $1 million.
“Considering the last couple of years, we are very pleased with it,” said Justin Jones, Department of Corrections director.
The agency’s budget will end furloughs for next fiscal year, he said.
The Attorney General’s Office started off with a 7 percent cut but had the Human Rights Commission and a legal aid program moved under its jurisdiction, along with the funding, which indicates the agency received an 8.3 percent increase in funding.
Meanwhile, the state Supreme Court received a 12.5 percent increase – nearly $2 million more.
“We have had to cut them over the last several years,” said Senate Appropriations and Budget Committee Chairman David Myers, R-Ponca City. “What we tried to do is get their budget back up to a number that was their base several years ago.”
The Oklahoma Department of Transportation received a 7 percent cut – about $8 million – but is expected to receive $70 million in bond funds pending legislative approval. Terri Angier, ODOT spokeswoman, said the budget won’t largely affect the agency’s eight-year roads program.
House Minority Leader Scott Inman, D-Oklahoma City, said the bond issue may run into trouble in the House. But House Speaker Kris Steele, R-Shawnee, said “we have vetted the agreement with our caucus and feel like it was received favorably.”
Key facts about Tuesday’s state budget deal:
1. The budget is balanced, as is required by the state Constitution. It includes no new taxes.
2. The state’s budget for fiscal year 2012, which begins July 1, would be $6.5 billion. That is 3.2 percent lower than the 2011 budget.
3. Education budgets are significantly cut in the proposal. Common school funding would go down $97.3 million (4.1 percent). Vocational education programs would be cut $8.2 million (5.8 percent). Higher education would be cut $58.2 million (5.8 percent). However, all three are targeted for supplemental appropriations later in the budget year.
4. Of 79 funding areas in the budget, only five got budget increases: Department of Central Services, up $1.3 million (8.4 percent); Oklahoma Tax Commission, up $85,000 (0.2 percent); Corporation Commission, up $1.2 million (11.7 percent); and the attorney general, up $1.1 million (8.3 percent).
5. Governor’s Office took a $149,077 budget cut (7 percent). House of Representatives budget was cut $767,089 (5 percent). State Senate budget was cut $587,989 (5 percent).
State budget details released
Democrats say tax incentives remain intact
By M. Scott Carter The Journal Record Posted: 09:31 PM Tuesday, May 10, 2011
OKLAHOMA CITY – Describing it as fiscally responsible and conservative Republican, legislative leaders announced a $6.5 billion budget deal for the 2012 fiscal year late Tuesday afternoon.
The agreement – presented at a press conference with Gov. Mary Fallin – leverages about $217 million in spending cuts with a $70 million transportation bond issue and $120 million in funds taken from the state’s cash reserve fund to backfill a $500 million shortfall.
Fallin said she was pleased by the agreement.
“At the beginning of this legislative session, I asked lawmakers to send me a plan that accomplishes three things,” Fallin said. “Balance the budget without raising taxes, prioritize spending to protect core government agencies like education, public safety, transportation and health and human services and pass legislation that makes our state government smaller, smarter and more efficient.”
The agreement includes cuts for most state agencies ranging from 1 percent to about 9 percent. Because of the emphasis on protecting core services, Fallin said, cuts to those agencies were significantly less than other agencies.
Lawmakers said they also agreed to reduce cuts to the Department of Corrections to less than 1 percent to prevent additional furloughs.
Documents released with the agreement show lawmakers plan to reduce spending for the Department of Education by 4.1 percent, the Department of Public Safety by 4 percent and the Department of Health and Human Services by 1.2 percent. The Oklahoma Educational Television Authority had its budget cut by $378,032, or 9 percent.
In addition, a supplemental appropriation of $21.4 million would be used to offset some cuts to the state’s three education systems. That measure would provide $10 million for higher education, another $10 million for the state’s common education system and $1.4 million for the CareerTech system.
“We plugged that money back in to lessen the cuts,” said House Budget Chairman Earl Sears, R-Bartlesville.
The agreement also includes a 7-percent cut – about $8 million – in the state’s transportation system, but House Speaker Kris Steele said those cuts would be offset by authorizing a $70 million bond issue for the transportation department.
“We faced a challenging financial situation again this year,” Steele, R-Shawnee, said. “But I am pleased we were able to put our heads together and come up a balanced budget that protects the core services our citizens expect.”
Oklahomans, Steele said, will be pleased with the results this budget will produce.
But while Republican lawmakers praised the agreement for its conservative approach to funding state government, Democratic lawmakers – who had not been briefed on the budget’s details yet – said they were disappointed it didn’t include the elimination of any tax incentives.
“After months of secret negotiations, the Republicans who run state government are finally ready to show all Oklahomans where their priorities lie,” said Senate Democratic Leader Andrew Rice, D-Oklahoma City. “They have chosen corporate special-interest tax breaks that will result in drastic cuts to important areas like public schools, senior nutrition centers and public safety.”
Republicans, Rice said, were disingenuous when they say these deep cuts are unavoidable.
“They had a choice, and they chose corporate special interests over middle class families,” he said. “We all know that you get what you pay for, and in this case Oklahomans will not be happy to see their communities short-changed by fewer police on the streets, larger class sizes for fourth-graders, and the closing of nursing homes.”
The Senate’s Republican leader, Brian Bingman, said the agreement reflects a commitment to fiscal responsibility while preserving core services.
“We are prioritizing our needs in the areas of public safety, education and transportation funding,” Bingman, R-Sapulpa, said.
With about three weeks left in the legislative session, lawmakers say they must finish the budget and several other policy issues before the Legislature adjourns on May 27.
