Oklahoma agencies told to brace for cuts after board certifies $611 million less to spend

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OKLAHOMA CITY — Some state agencies can expect deeper cuts in spending as a result of a $611 million hole in the next fiscal year's budget, but Gov. Mary Fallin said Tuesday the state's rainy day fund and other state accounts should be tapped to ease the burden.

A state board led by Fallin formally certified that the Legislature will have $6.6 billion to appropriate to state agencies for the fiscal year that begins July 1, which is about 8.5 percent less than they spent last year.

"It's not comfortable for the state of Oklahoma, but I'm confident we'll get through it," Fallin said. "There will be budget cuts. We're going to prioritize our spending on certain areas: education, health and human services, public safety, and certainly infrastructure issues. But in the meantime agencies should be prepared to take a cut in their appropriations."

News of looming budget cuts was unwelcome news to public school teachers in Oklahoma, since funding for K-12 schools accounts for about one-third of the money spent by the Legislature.

"We're just trying to do more with less," said Lori Burris, a special education teacher at Monroney Middle School in Midwest City, where an increasing number of students has led to textbook shortages. "We don't have the tools or resources we need so that our kids can be successful."

The decline in available revenue is attributed largely to a slide in oil and natural gas prices and an increasing amount of state tax collections that are diverted "off the top" to fund various projects, including roads and bridges, scholarships and other education programs. Budget writers last year also exacerbated the shortfall by using nearly $300 million from various agency revolving accounts to shore up the budget.

Democrats say the shortfall is mostly a self-inflicted crisis the governor and GOP-controlled Legislature created by doling out hundreds of millions of dollars in corporate tax credits and incentives, plus a cut in the individual income tax rate that will go into effect on Jan. 1.

"The tax cuts, the tax credits, and the unconstitutional raiding of the revolving funds, most of them have happened under the watch of the governor and Republican leaders," said House Democratic Leader Scott Inman of Oklahoma City. "Their decisions have directly placed us in this situation, and it's their fiscal irresponsibility we're having to answer for now."

House and Senate budget leaders indicated repeatedly Tuesday that all options were on the table for helping to close the budget gap, including tapping some of the $535 million available in the state's constitutional Rainy Day Fund.

"I think you have to look at everything, in addition to reducing spending in areas that aren't as great a priority as others," said House Speaker Jeffrey Hickman, R-Fairview.

The Legislature already can access $200 million from the Constitutional Reserve Fund because of the general revenue shortfall in the upcoming fiscal year. Another $133.8 million could be tapped with a three-fourths vote in the Legislature, but that couldn't happen in the House without the help of Democrats.

"Our members are going to find it very difficult to tap into the state's savings account while we give away $120 million to $150 million worth of income tax cuts at the same time," Inman said.

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