KGOU

Capitol Insider: Agency Budget Requests Reviewed

Dec 13, 2019

As lawmakers await state revenue figures from the Board of Equalization, state agencies are preparing budget requests, with a little help.

TRANSCRIPT:

Dick Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics, policy and government. I'm Dick Pryor with eCapitol news director Shawn Ashley. Shawn, agency budget hearings are going on at the capitol and will continue into early next year. Now, normally, agencies prepare their budget requests to the legislature on their own, but the process is a little different this year and that's gotten the attention of legislative leaders.

Shawn Ashley: That's correct as we've moved through these early budget hearings. What we began hearing from some of the agency directors is that they had already been in talks with the governor's office about what their budget should look like. Now, normally, agency leaders prepare their budgets on their own. They submit them to the legislature. They submit them to the Office of Management and Enterprise Services, who advises the governor. And they all work from that same pallet then. But it seems that the governor has inserted himself into the process a bit earlier. Even his office acknowledges that now. Now, in the case of the House of Representatives, House Appropriations and Budget Chairman Kevin Wallace was not too bothered by this. He said in all of his years in the legislature, he has never seen a governor's budget presented on the first day of the legislative session ultimately become law without changes being inserted by the legislature.

Dick Pryor: It's just a recommendation.

Shawn Ashley: The executive budget often is just a recommendation, sort of an outline of the direction the governor wants to go. But for Senate Appropriations Chair Roger Thompson, he said he was very, very concerned and his reasoning was this budget request should reflect the needs of the agencies and if the governor is intervening in that process and getting agencies to reduce their requests the legislature will not see those needs and not know what is really needed to properly fund those agencies. And that will undermine the process in order. In order to avoid that Senator Thompson said he is working with the governor's office, meeting with Secretary of Budget Mike Mazzei and discussing their involvement as well as other needs that the agencies might have that aren't reflected in those requests.

Dick Pryor: What is the governor's office saying about the concerns?

Shawn Ashley: Well, the governor has stressed that the last year was a good year for the state in terms of the budget that needed expenditures were made and that the lid was kept on some of those areas where growth could have gotten out of control. In the end, one of the things they do is they point to Moody's Investment Service, which upped the state's credit outlook for the coming year based on the fact that the state's fiscal management system seemed to be improving under Governor Stitt’s leadership.

Dick Pryor: Shawn, the revenue estimate for next fiscal year will be released soon when the Board of Equalization meets on December 20th. Now, state Treasurer Randy McDaniel and the Office of Management and Enterprise Services have already given us a bit of a preview.

Shawn Ashley: The last couple of months have been a little bumpy for state revenue collections. State Treasurer Randy McDaniel pointed out that for the second month in a row, collections were less than those of the prior year. In this case, for the month of November, we also saw in the General Revenue Fund report from the Office of Management and Enterprise Services that although they exceeded the estimate collections versus the prior year, we're below those. And one of the key areas of concerns here has been the state sales and use tax, the tax charge for the purchases of various goods and services. It has dropped below previous years for a couple of months now. And that is our second-largest source of revenue for the General Revenue Fund and therefore for state appropriations. So it looks like things may be a little tight as we move into calculating the revenue estimate.

Dick Pryor: If that trend continues and it IS tight, what will that mean for the state budget and appropriations next year?

Shawn Ashley: Well, I hate to sound like Jeffrey Toobin on CNN, but I kind of hate to predict the future. But based on the numbers we've been seeing, revenue collections continue to grow, but just not as fast as they have in the past months and the past year or so. If I were guessing, what I would say is that we will see an increase in the amount of money available for appropriation when the Board of Equalization meets on December 20th. It won't be a big growth number, but there will be some growth.

Dick Pryor: We're nearing the end of the year when Governor Kevin Stitt maintains that tribal gaming compacts with the state will expire. Tribal nations see that differently and are looking for the compacts to renew automatically. What's happening in this dispute?

Shawn Ashley: Well, not a lot. Right now, it appears there's been a lot of talk in the press. But really what we have yet to see are tribal leaders and the governor sit down at a table across from one another and negotiate what they might do in terms of resolving their dispute and any changes they might make in the compacts. What we have seen for really the first time since the dispute began back in July is that legislative leaders have weighed in. Speaking at the State Chamber of Oklahoma's Public Affairs Forum, we saw that Senate President Pro Tem Greg Treat is sort of taking a wait and see approach because the legislature doesn't have any direct involvement in this process, although somewhere down the line they could be asked to make statutory changes that are related to the compacts. House Speaker Charles McCall said he believes negotiations remain possible and that a win-win solution could be achieved. Senate Minority Leader Kay Floyd, on the other hand, said she is a little concerned about some of the rhetoric that has been involved in these talks before they have gotten to the negotiating table and is worried about the impact that might have on state and tribal relations. House Minority Leader Emily Virgin was very forthright, saying she believed the governor has gotten bad legal advice in terms of dealing with the compacts, which she said a plain reading indicates they automatically renew as long as there's other forms of gaming, specifically that at the horse racing tracks in the state of Oklahoma.

Dick Pryor: This should all be coming to a head soon.

Shawn Ashley: It should be. The governor claims that these expire on January 1st, 2020, and we're only a few weeks away.

Dick Pryor: All right, Shawn. Thanks.

Shawn Ashley: You're very welcome.

Dick Pryor: And that's Capitol Insider. If you have questions, email us at news@kgou.org, or contact us on Twitter, @KGOUnews. You can also find us online at kgou.org and eCapitol.net. Until next time with Shawn Ashley, I'm Dick Pryor.