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Shortfall may prompt Oklahoma special session

Shortfall may prompt Oklahoma special session

 


Legislators could look at ways to deal with revenue dip, including tapping Rainy Day Fund
BY JULIE BISBEE AND MICHAEL MCNUTT
Published: August 20, 2009

Legislators may return late this month in special session to deal with the state’s declining revenue.

Legislative leaders and the governor’s office are trying to reach an agreement on the topics to be discussed in a special session. They include tapping into the state’s savings account, the Rainy Day Fund, or using federal stimulus money that was kept in reserve for the 2011 fiscal year.

Gov. Brad Henry’s spokesman, Paul Sund, said Wednesday the governor is "in general discussions with legislative leaders about the state’s revenue outlook and (has) made no final definitive decisions on anything yet.”

The governor can call a special session, or legislators can call for one with a two-thirds vote.

A spokeswoman for House Speaker Chris Benge, R-Tulsa, and a spokesman for Senate President Pro Tempore Glenn Coffee, R-Oklahoma City, would not comment.

Several legislators said they have been told a special session could be held the week of Aug. 31.

"We haven’t been given an official notification, but I’m not making any plans for the week of Aug. 31,” said Sen. Jay Paul Gumm, D-Durant. "None of this is rocket science. We’ve got to decide if we (should) allow automatic budget cuts to happen, or if we should make targeted cuts. It will be interesting.”

A special session would cost about $19,608 each day both the House and Senate members are in session. Lawmakers could finish their work in as few as three days.

If legislators meet in special session the week of Aug. 31, it would give them time to act before the state makes its allocations to state agencies for September. That usually occurs the second week of the month after tax collections for the previous month are compiled.

Weighing the options
Revenue collections for July were below prior year collections. It was the seventh straight month that collections came in below estimates.

The state finance office earlier this month ordered immediate 5 percent across-the-board cuts to make up for the declining state revenue. During the last legislative session, many agencies received budget cuts of varying amounts.

Legislative leaders, the governor’s office and budget officials have been in talks to decide how to deal with the revenue shortfall and the likelihood that tax collections will continue to come in below what legislators budgeted to fund state agencies.

Legislators have several options. They could use some of the Rainy Day Fund, which has nearly $600 million. The state constitution allows up to three-eighths of the fund, or $223.7 million, to be used upon a revenue shortfall declaration by the state Board of Equalization. The other 37.5 percent can be used to stabilize the budget in another fiscal year; the remaining 25 percent may be spent on projects labeled as emergencies.

Lawmakers could use some of the approximately $600 million in federal stimulus money still available. The governor’s office and legislative leaders had set aside that money to use for the next fiscal year.

Or they could make budget cuts to state agencies.

The sour condition of the state’s economy is no surprise. Legislative leaders and the governor used about $630 million in federal stimulus money to make up for a $600 million shortfall in state revenue for this fiscal year.

Tax collections for the state’s general revenue fund in July came in about $75.9 million below what is necessary to pay the state’s bills for August, budget officials said.

Budget officials borrowed about $54 million from the state’s cash reserves and from other funds to make up most of the deficit.

Otherwise, the budget cuts to state agencies this month would have been about 17 percent.

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