OKLAHOMA CITY – While the state is facing a major budget deficit, state leaders say things are only getting worse.
Last month, Oklahoma officials announced that the state is confronted with a $1.3 billion shortfall, nearly 20 percent of last year’s spending.
On Thursday, State Treasurer Ken Miller announced that February’s revenue is down by almost $90 million compared to last year’s numbers, or more than 10 percent.
In February, the state received $758.5 million in gross receipts, making it the lowest February total since 2011 when Oklahoma was recovering from the recession.
“With oil prices off their 2014 peak by some 70 percent and our state’s anchor industry in the midst of correction, we have apparently not yet found the bottom and continue to see the spillover effect in all major revenue streams,” Miller said.
During her ‘State of the State’ address last month, Gov. Fallin said that many agencies and departments will see a 3 percent cut to try to make ends meet.
However, it seems deeper cuts are necessary.
On Thursday, state officials announced that agencies will be facing additional budget cuts.
State finance officials told the Associated Press that Oklahoma schools, prisons and other state agencies will have their budgets cut by an additional four percent for the rest of the year.
Those additional cuts are expected to equal close to $235 million.
Public schools alone will have nearly $110 million cut from their budget for the fiscal year that ends June 30.
According to state documents, the Department of Corrections is facing a $27.5 million cut and the Health Care Authority will lose $63.8 million in funding.
The Department of Human Services will also lose $43.7 million, while the Department of Mental Health loses $22.7 million from its budget.
“These midyear cuts are already into the bone at some agencies, and next year’s cuts may go right through the bone unless serious actions are taken. The governor and legislative leaders recognize the severity of the situation and are working on solutions, but I’m convinced there are still rank and file legislators who have yet to grasp the seriousness of the challenge at hand. This deepened cut isn’t pleasant and should serve as a reality check and call to action for anyone who thinks this problem fixes itself with short-term budget gimmicks. This is a long-term problem that will require tough, long-term solutions,” said Preston Doerflinger, Secretary of Finance.
“This is a brutal time for schools. A second General Revenue failure means schools will have lost nearly $110 million since the start of the spring semester alone, and that does not take into account next fiscal year, which looks equally bleak. Efforts that districts are making to cope with these cuts today will further impact the next school year, as they are forced to significantly deplete their cash fund balances,” State Superintendent of Public Education Joy Hofmeister said in a statement. “The Oklahoma State Department of Education has worked hard to minimize the cuts’ impact on instruction, but we are no longer able to soften the blow. Many rural districts indicate they will immediately initiate a four-day school week for the remainder of the school year. Educators are facing heartbreaking decisions that ultimately will affect students in the classroom. Our schoolchildren are the ones who will pay the steepest price.”
The Oklahoma Public Employees Association released a statement expressing disapproval of the further budget cuts.
“Due to continued reductions, Oklahoma is at a crisis point where many Oklahomans will be directly impacted by the cuts.Our state agencies have been told to cut another four percent yet for many the only way to do that is to halt services that our citizens rely on,” said Sterling Zearley, OPEA executive director.
“Our prisons are going to be even more dangerous when Department of Corrections reduces staff. There will be fewer nurses’ aides caring for veterans in our centers. DHS workers will have higher caseloads as they cut or furlough employees,” he said.
“Unfortunately, these cuts are in every agency and the services they provide.”
Education leaders quickly responded to this news.
“Today’s news is devastating for students and education in general. This round of revenue failure will have an additional budgetary impact of $2-million for the Oklahoma City Public School District,” said Oklahoma City Public Schools Superintendent Rob Neu. “We will continue to deplete our fund balance this fiscal year since those funds have been budgeted and spent. OKCPS will put forward our best efforts to make strategic reductions, and do everything we can to financially protect our classrooms as we prepare for next school year. But these cuts only deepen the reductions we will need to make in the 2016-17 school year. I am urging legislators to drop everything and focus on fixing the structural issues related to the budget, and the cyclical impact that the volatile oil and gas industry has on the state’s budget. Let’s not act surprised next time, this has got to be fixed.”