OKLAHOMA CITY (KFOR) – Lawsuits and claims of broken deals were part of a two-week budget battle between the Oklahoma State Legislature and Governor, but today, Governor Stitt backed down in order to focus on what looks to be dire straits for the state financially as oil prices continue to fall and the COVID-19 pandemic rages on.
The state finance officials declared the budget shortfall for 2020 at $459 Million at a Board of Equalization meeting Monday. State savings can now be used to almost completely patch that huge hole in the budget for May and June, thanks to legislation passed two weeks ago.
“We didn’t spend more than we should have last year. We have the largest savings account in state history with a billion dollars,” said Governor Kevin Stitt.
But as state officials patch the hole in this year’s budget, a much larger one is on the horizon for 2021 as oil prices hit record lows today and the COVID-19 pandemic continues to wreak havoc on the economy.
“Our budget is getting nailed on two different fronts,” said Stitt.
The Governor reports a 1.4 billion dollar deficit expected in 2021 and a 1.6 billion dollar shortfall in 2022.
State officials say it could be a worse recession than 2008.
“We are going to have to tighten our belt,” said Stitt.
The Governor is calling for cuts to state agencies and to space out the use of savings over the next years.
He also claims that technology upgrades and agency consolidation could be used to save money and shrink the budget deficit.
Legislators agree cuts are likely, but…
“We have to be able to look at all available options in order to hold core services harmless at a time when more people than ever are depending on those core services,” said House Minority Leader Emily Virgin.
Both the Governor and Minority Leader Virgin say its unclear if federal CARES ACT dollars will be able to be used to help with the budget shortfalls in 2021.
Officials say the state budget was built on oil prices at over 50 dollars a barrel… Today, prices dropped below 0.
Officials say 8-to-10-thousand oil and gas jobs could be lost in Oklahoma before the end of the year.