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Governor: Special session may be called to deal with fiscal problems

Governor: Special session may be called to deal with fiscal problems

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The Journal Record -

November 18, 2009

OKLAHOMA CITY – Gov. Brad Henry said Tuesday that he is considering calling lawmakers back to the State Capitol for a special session in January to address the state’s growing fiscal problems by tapping reserve funds and implementing targeted budget cuts.

Henry also wants to see an updated state revenue estimate and has asked the legislature to conduct a series of public hearings on budget cuts.

The governor said budget decisions will hinge on the official estimate developed by the State Equalization Board Dec. 21.

“We must have a more reliable fiscal roadmap in our hands to make the many difficult decisions required to protect core services and balance the budget,” Henry said.

He is asking legislative committees to hold hearings on budget reductions in November and early December, reviewing how state programs and services would be affected if agencies had to bear further cuts in the months to come.

“I don’t think anyone truly understands the consequence of another deeper round of across-the-board cuts, because there has been no public review or discussion about the potential impact on vital programs and services,” Henry said.

The governor said that when the state accepted $1.2 billion in federal stimulus funds, it agreed to maintain funding levels for public education and health care. He said continued cuts in those areas could jeopardize the federal money, worsening the state’s budget difficulties.

“While some are advocating deeper across-the-board cuts, I believe it’s critical to do our homework first and understand what will happen if we do,” Henry said. “Ultimately, I believe a targeted approach is best, with strategic, surgical cuts that protect priority areas.”

Fiscal year 2010 budgets for most state agencies were cut 7 percent during the 2009 legislative session.

Earlier this month, officials announced that general revenue collections came in below the official estimate for the 10th consecutive month in October, requiring a 5-percent reduction in the monthly allocation to state agencies for the fourth month in a row.

Agencies have been told to expect monthly cuts of at least 5 percent through the remainder of the fiscal year, which ends in June.

Henry said that November revenue collections are usually insufficient to fund state services in December. That may mean officials will have to transfer more money from other state funds to cover December allocations.

“No one likes the idea of transferring funds to make ends meet, but I think the approach is preferable to implementing a 20- or 30-percent, across-the-board cut to state agencies and programs, particularly when we have $600 million in the Rainy Day Fund,” he said.

The state also has about $600 million remaining in stimulus money.

Senate President Pro Tem Glenn Coffee, R-Oklahoma City, said senate budget leaders will have information from budget hearings in time for a discussion with Henry before a possible January special session.

“With the state looking at the possibility of a shortfall of up to a billion dollars, it is a high probability that agencies will face deeper cuts, even if a portion of the Rainy Day Fund is accessed in a special session,” Coffee said.

House Speaker Chris Benge, R-Tulsa, said the plan laid out by Henry is based on discussions with both legislative houses. He said the House is working on scheduling budget hearings in December.

“I understand there is much anxiety about our budget situation,” Benge said. “But we are striving to find a balance between how much should be cut and how much from the Rainy Day Fund should be deployed to ensure we balance our budget this year, while also setting our state up to withstand the possibility of ongoing declining revenues into the future.”

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