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Senate set to hear latest budget bill to fix state’s budget shortfall

OKLAHOMA CITY - Senate leadership it plans on hearing the latest attempt to fix the state's budget shortfall and prevent major cuts to state agencies' core services on Friday.

After nearly two hours of questions and debate, the "cash and cuts" or "Plan B" bill, HB 1019, passed the house 56-38 Wednesday afternoon. The plan calls for use of state cash and cuts to some agencies.

"I'm trying to figure out where to go on this because I told all of my constituents I'm not going to vote for cuts. I’ve been at the point where we’ve cut enough," said Rep. Todd Thomsen, R-Ada, arguing against the bill. "I told all of my constituents I'm not going to vote for cuts. I’ve been at the point where we’ve cut enough.”

"We’re looking at a list of cuts that’s despicable," said Rep. David Perryman, D-Chickasha, "And this isn’t the solution.”

"This bill has to pass. These services have to be protected," said Floor Majority Leader Jon Echols, R-Oklahoma City. "I’m proud of my green vote and I will stand by my vote just like I have others.”

The bill includes $60 million worth of cuts across various state agencies while also using millions in rainy day funds, carryover cash, and revolving money. The package would also include a recently passed measure to raise the gross production tax (GPT) on legacy wells from four to seven percent.

The legislature is in its eighth week of special session to fix a $215 million budget shortfall created after the state supreme court ruled a cigarette fee unconstitutional. The bill is the latest attempt to prop up state health agencies hit by the supreme court's ruling.

"For the amount of money we have, this is the best budget we’ve put together for today," said house budget committee chair Kevin Wallace, R-Wellston on the house floor Wednesday. "Healthcare is going to be in crisis mode in two weeks. We have to act now ."

The bill, however, calls for reduced cuts to those agencies -- the Department of Human Services, the Oklahoma Healthcare Authority, and the Department of Mental Health and Substance Abuse Services -- between $4 and $15 million.

The bill also includes cuts to various agencies including the state Department of Veterans Affairs, the Ethics Commission, House of Representatives and the Senate -- cuts between 2.5% and 2.7%.

For weeks, legislators have failed to find enough votes to raise revenue, despite several bills reaching the house floor.

Last week, a bill taxing cigarettes, fuel, and low-point beer, and raising GPT on oil and gas wells, failed to reach the constitutionally-required amount of votes for a revenue raising measure.

“I’m very disappointed that we weren’t able to come to an agreement on a way to fix our structural issues within our state budget," said Gov. Mary Fallin in a statement Wednesday afternoon after the passage of HB 1019.

In the statement, Fallin noted the next session is just months away and the state is already facing a $550 million budget shortfall. Add to that the upcoming election year, the window to raise taxes and provide the state with recurring revenue becomes even slimmer.

"This is not what I want, and I can tell you the majority of the Legislature doesn’t want it either," said Fallin.

“I have told our legislative leaders that I would veto any bill that makes severe cuts of $90 million or more to state agencies and spends the $83 million in cash reserves. When a budget bill comes to my desk, I will need to review any additions or changes to what has previously been discussed with our leaders.”

Senate leadership says the appropriations and budget bill will likely be heard on the senate floor Friday.