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Straight talk needed over state budget hole

Straight talk needed over state budget hole

Our views Speaker says ‘face reality’

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The Oklahoman Editorial

Published: November 15, 2009

IT was just three years ago that lawmakers had to figure out what to do with a billion dollars in surplus revenue. Might they soon be asked to deal with a deficit that approaches the same amount?
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House Speaker Chris Benge believes they could, which is why he is advocating telling state agency heads, in clear terms, what will be needed to deal with the financial crunch. "We need to face reality and talk to the agencies about how serious the situation is,” Benge, R-Tulsa, told us Thursday.

Senate President Pro Tem Glenn Coffee, R-Oklahoma City, is in the same camp. Last week when the latest revenue report was issued, Coffee said it’s "fantasy” to think the state can move ahead without taking a close look at all agencies and making "real cuts in spending.”

State agencies since August have been ordered to make 5 percent cuts. Those are expected to continue, and come on top of 7 percent cuts that were made to a number of agencies when this fiscal year’s budget was formulated. To keep the cuts at 5 percent, money has been transferred from cash accounts — about $155 million so far. That will have to be paid back by the end of the fiscal year. Benge, chairman of the House Appropriations Committee before becoming speaker, isn’t a fan of moving money around in that way because he says it just delays the inevitable.

Speaking of the inevitable, it’s a certainty that the state’s $600 million Rainy Day Fund will be used to help get the state through this fiscal year. Lawmakers can’t get to all of it right away, and shouldn’t attempt to because it’s likely fiscal year 2011 will be every bit as challenging as this one. Recall that $600 million in federal stimulus money is available, but won’t be when the FY 2011 budget is written next spring.

Gov. Brad Henry surely remembers what it was like early in his administration to have next to nothing in the Rainy Day Fund when he was trying to climb out of a huge budget hole. That episode followed the 9/11 terrorist attacks that jarred the nation’s economy. In relatively short order, things began turning around. We’re dealing now with a worldwide recession that is showing only fragile signs of abating.

State Treasurer Scott Meacham says he is "cautiously optimistic” that the state economy has bottomed out. Benge isn’t so sure, not with natural gas prices stagnant and record reserves on tap. As long as that continues, the state’s revenue picture will be a concern.

"I’ve been optimistic,” Benge said. "But I think the trend is pretty clear now. We’re in a tough spot ... I don’t see it turning around.”

The sooner all state agencies know that, the better.


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