Governor Mary Fallin says state legislators must return to the Capitol for a special legislative session. In a statement released Wednesday, Fallin said the session is the only way to fill a budget hole created when the Oklahoma Supreme Court struck down a smoking cessation fee last week.
The $1.50-per-pack fee on cigarettes was expected to generate $215 million for the state budget in fiscal year 2018. The vast majority of the money was allocated for the Department of Human Services, the Oklahoma Health Care Authority and the Department of Mental Health and Substance Abuse Services. Now, the three agencies could lose significant portions of their appropriations for this fiscal year.
“These agencies and the people they serve cannot sustain the kind of cuts that will occur if we do not find a solution,” Fallin said in the statement.
The Department of Mental Health and Substance Abuse Services could see the biggest cuts if other funding sources are not found. It was slated to receive $75 million, or about 23 percent of its total appropriation, from cigarette fee revenues. DHS would have received $69 million from cigarette fee revenues, about 10 percent of its total appropriation. OHCA would have received $70 million, about 7 percent of its total appropriation.
“Without legislative intervention, DMHSAS said it would run out of state appropriations in November. OHCA said it would run out of state funds in January and DHS said it would out of state funds in May,” reads the statement from the governor’s office.
Spokespeople for each of the agencies declined to comment on the possibility of budget cuts or a special session.
According to the governor’s statement, the state Office of Management and Enterprise Services can only transfer funds to affected agencies if the legislature directs it to do so. State law allows the director of OMES to borrow money from the state treasury to allocate appropriations, but the state legislature must make those appropriations first.
“No money can be spent from any state fund unless the Legislature specifically appropriates it,” Fallin said.
The state Supreme Court struck down the cigarette fee after hearing arguments last week. It ruled that the fee was a revenue-raising measure that violated the state Constitution, because it was passed in the last week of the 2017 legislative session, did not pass with a three-quarters majority vote from lawmakers or a vote of the people, and originated in the Senate, not the House of Representatives.
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