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Oklahoma House Sends $6.8 Billion Budget Bill To Governor's Desk

May 24, 2016

The Oklahoma House of Representatives passed a $6.8 billion budget in the waning hours of the legislative session Friday. The bill was narrowly approved with a vote of 52-45 and now goes to Gov. Mary Fallin's desk for her approval.

Updated May 27, 4:43 p.m.

During floor debate, House Speaker Jeff Hickman, R-Fairview, said the budget isn’t perfect, but it funds core services.

“After hearing for months that hospitals would be closing when provider rates were cut, we put a budget together that doesn’t cut provider rates. Hospitals will stay open," Hickman said. "After hearing nursing homes will close and you’ll have to pick up your grandmother on the sidewalk out front at 5:00 on Wednesday, we’ve developed a budget that makes sure nursing homes will stay open. There will be no cuts in provider rates."

The budget deal closes a $1.3 billion shortfall by cutting spending to most agencies, tax credit reforms, borrowing money through bonds and the use of one-time money like Rainy Day Funds.

Jason Dunnington, D-Oklahoma City, voted against the bill. He said the one-time money was a point of concern.

 

“It’s something that this body has done last year and a couple of years prior to when I’ve been a part of this body," Dunnington said. "It’s becoming a habit and it’s a habit that I believe we will need to break if we are ever going to truly make the kind of investment that we are all asking to make in our state.”

The debate on the final day of the session was fiery. Party leaders accused each other of starving the state of revenue for key services. House Floor Leader Jason Nelson, R-Oklahoma City, blamed Democrats for trying to raise income taxes and using Medicaid expansion as leverage to back a tobacco tax hike.

"It’s funny that the minority party keeps insisting we raise the penalty on working instead of the penalty on cigarettes," Nelson said.

 

House Minority Leader Scott Inman, D-Del City, called that "garbage."

"You are holding 200,000 people hostage because you won’t support a plan because the president of the United States’ name is attached to it," Inman said.

The budget bill raises $969 million in revenue and authorizes $200 million in bonds to pay for roads and bridges.

Updated May 25, 3:17 p.m.

Common education, the Department of Human Services, and the Department of Mental Health and Substance Abuse Services all take reductions between 2 and 5 percent of what was originally appropriated last year. Higher education stands to lose nearly 16 percent.

When asked why higher education took such a sharp cut, state Sen. Clark Jolley, R-Edmond, said Oklahoma’s colleges and universities have a low tuition rate.

 

“There is a thought that tuition increase could defer because we are relatively low on tuition in Oklahoma," Jolley said. "That is one of the thoughts that I just believe we have to balance the budget on what we have available.”

State Sen. Mike Mazzei, R-Tulsa, voted against the budget because he thinks it sets up a structural deficit for next year of up to 600 million. He also objected to the lack a teacher pay raise and no apportionment reform.

“There’s no teacher pay raise in this plan, which means this plan creates no offset to the ballot question that the people of Oklahoma are going to vote on in November regarding a sales tax increase,” Mazzei said.

The budget plan passed the Senate 30 to 16. The House will take it up on Friday.

 

Updated 2:06 p.m.

The $6.78 billion FY 2017 budget deal is almost $361 million less than the original FY 2016 budget, and $68 million below the adjusted FY '16 appropriations after the mid-year revenue failure. 

Oklahoma's Fiscal Year 2017 General Appropriations Bill Summary

"There are still reductions in this budget, and it requires more hard votes to pass, but it is certainly a workable budget even amid a major energy sector downturn that is creating difficulties all across Oklahoma," Fallin said in a statement. "We worked hard to protect key core services - common education, health and human services, corrections, mental health services and the Oklahoma Health Care Authority – while keeping our eight-year transportation infrastructure plan intact.”

Neither the Oklahoma State Department of Education nor the Oklahoma Department of Corrections saw additional cuts. State Superintendent of Public Instruction Joy Hofmeister called keeping common education's budget flat "a herculean effort."

"This budget represents a best-case scenario as we plan for the next school year," Hofmeister said in a statement. 

The Oklahoma Health Care Authority will see an increase of $83.8 million over the revised mid-year allocation. That will still mean a 3 percent provider rate reduction. The OHCA had feared cuts as high as 25 percent, which likely would've reduced services and shuttered many rural hospitals.

The Department of Human Services will receive an additional $16.3 million compared to the FY '16 mid-year appropriation, and the Department of Mental Health and Substance Abuse Services will get an additional $6.9 million.

Most state agencies face cuts that average about 5 percent when compared to the adjusted mid-year budget. Higher education will see a 7.66 percent reduction, and the Oklahoma Department of Transportation will take a 16 percent hit.

“The absence of various revenue measures required deeper reductions to higher education and transportation in order to avoid truly unacceptable funding levels for K-12 schools and hospitals," Finance Secretary Preston Doerflinger said in a statement. “Transportation and higher education have superior financial positions compared to the rest of government and can absorb reductions far better than common education and health care could."

Doerflinger says ODOT has said no road or bridge projects will be significantly affected by the Fiscal Year 2017 allocations, and the Oklahoma's public colleges and universities have started cutting costs ahead of an expected funding cut.

Original Post

Oklahoma lawmakers have worked out the framework for a state budget agreement. State Sen. Clark Jolley, R-Edmond, said the proposed deal is just under $6.8 billion.

“I think it’s fair to say that we got a fairly warm reception by our caucus to the proposal, but the devil’s in the details," Jolley said. "As we continue to digest it, I’m certain we’ll have members from both parties that love it and members of both parties that hate it.”

The Senate Appropriations Committee chair stressed that Tuesday’s deal is tentative, and said lawmakers have a long road ahead between now and Friday's 5 p.m. adjournment deadline.

“We have to pass all of these bills through the Joint Committee on Appropriations and Budget today, then they’d have to pass out of the chambers of origin on Wednesday, and the opposite chamber on Friday,” Jolley said.

The budget deal contains targeted agency cuts instead of across-the-board reductions. Common education will not be slashed any further, eliminating the need for four-day school weeks and massive teacher layoffs.

“When you look at a 1 percent cut to common education, it’s roughly the size of the entire budget of the Department of Agriculture,” Jolley said. “A 1 percent cut to common ed. is $24 million.”

Jolley also said the state’s Pinnacle Plan would be fully funded, and rate cuts to the Department of Human Services could be fully restored. He also said a proposed 25 percent cut to the state’s Medicaid reimbursement rate could be avoided.

“We’re going to make sure that there are not the draconian provider-rate cuts for Medicaid – that Medicaid actually will see hopefully a negligible cut in provider rates,” Jolley said.

Jolley said the budget deal has no new proposals for tax or fee increases other than what has already been presented publicly. It uses up to $144 million in Rainy Day Funds and less than $300 million in bonding.

House Speaker Jeff Hickman, R-Fairview, says more details will be released Tuesday afternoon.

“Our belief is that we have reached an agreement that reflects the priorities of Oklahomans, addresses critical needs in the middle of a historic oil bust in our state,” Hickman told reporters Tuesday morning.

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