OKLAHOMA CITY – After it was announced that Oklahoma’s revenue was down by 12 percent, it is expected that a revenue failure will be declared.
November’s revenue for the state was down $50.1 million from what was expected and budgeted.
Officials say the state will be facing budget cuts for “appropriated agencies” since the Sooner State is facing a $900.8 million shortfall leading into the 2017 fiscal year.
“It’s going to be the biggest fiscal challenge since the years following the 2008 recession, and we’ll need to meet it head on with all hands on deck,” State Secretary of Finance Preston Doerflinger said.
Many agencies are preparing for cuts, including the Oklahoma State Department of Education.
“The state revenue failure will have a significant and painful impact on our schools during a time in which every dollar is precious. It is difficult to foresee a scenario in which Oklahoma’s schoolchildren will not feel the negative impact of this crisis,” State Superintendent of Public Instruction Joy Hofmeister said in a statement. “The Oklahoma State Department of Education and schools across the state of Oklahoma are bracing to take action given the new fiscal reality. Our hardworking and committed educators are already doing heroic work under difficult circumstances. We owe it to them and most importantly to the children who depend on them to move forward responsibly and with the importance of every single student’s education in mind.”
Doerflinger credits dropping oil prices with the shortfall.
Many are saying state agencies cannot afford to take another hit.
“Because state agencies have reduced their budgets over the past several years, most of them have little room to make more cuts without reducing the services they currently provide,” Sterling Zearley, the executive director of the Oklahoma Public Employees Association, said. “Agency leaders tell us it would be difficult to make the anticipated cuts without directly impacting core services. They have already reduced their budgets significantly over the past few years.”
However, House Democratic Leader Scott Inman says the shortfall is self-inflicted.
“The Republican-controlled Legislature helped create this financial crisis by cutting over $1 billion in income taxes since 2004, coupled with enactment of nearly $2 billion in tax credits and exemptions. Just a week ago Republican State Treasurer Ken Miller described repeated reductions in the state income tax as ‘devastatingly irresponsible’ considering the current funding status of core services.
Nevertheless, in two weeks Oklahoma will experience its first tax cut in state history to be enacted at a time of budget deficits. House Democrats tried repeatedly to postpone or repeal that tax cut, but every Republican in the House spurned our attempts.
The $188 million state budget gap of 2014 tripled to a budget deficit of $611 million in 2015, and the latest projection is a deficit that will be half again higher: $900.8 million.
The GOP-controlled Legislature began cutting core state services when oil was commanding $100 a barrel. The Oklahoma Health Care Authority has had to slash $446 million from its budget in the past five years, adversely affecting low-income families and health care providers. Public education in Oklahoma has experienced the deepest cuts of any state in the nation.
Republicans campaigned on a platform of fiscal responsibility, but instead they have presided over fiscal insanity. It’s long past time for this state’s Republican leaders to stop governing by a failed political philosophy and begin to govern with an understanding of political reality. It’s disingenuous to wring one’s hands in despair when the house is on fire, if you helped light the match.”