The Governor, Speaker and Pro Tem announced a budget agreement that should allow the legislature to meets it projected Sine Die Adjournment date this Friday. 

The compromise will protect four key functions of government from cuts in the coming fiscal year.  Those four areas are: education, health care, public safety and transportation.  The Governor and legislative leaders made use of a little more than half of the federal stimulus money in order to fill budget holes created by a reduction in state revenues coming to the state.  

The legislature has reached an important milestone.  This was the last week when bills from the opposite house could be heard on the floor.  What this means is that the only bills that will be heard on either house floor from now until sine die adjournment will be for the purpose of accepting or rejecting amendments or to consider conference committee reports.  Amendments will no longer be considered on the floor.  Any amendments to bills will now have to come in the various conference committees that are appointed to write the final version of the legislation.  Also, the General Conference Committee on Appropriations (GCCA) will begin its serious work on writing the final version of the state budget

Appropriations Committee members in both houses continued to study the state revenue picture in order to form an idea of how they will have to deal with agency budgets in the last two months of the session.  Of particular interest will be tax collections for March that will be announced by State Treasurer Scott Meacham on April 14.  If revenue collections fall below the constitutionally-mandated five percent cushion, automatic across-the-board budget cuts will be triggered.  House Speaker Chris Benge and Senate President Pro Tem Glenn Coffee both said they would prefer to make “surgical” cuts in advance of such mandated cuts.  They said that agencies would be better able to make cuts now rather than later in the fiscal year.

Senator Glenn Coffee, President Pro Tempore of the Oklahoma State Senate, was among a number of legislative leaders from across the country who met with President Obama and Vice-President Joe Biden last week to hear details of the federal stimulus plan.  According to Coffee, the President said that federal regulations have been put in place to ensure that states spend the federal money as quickly as possible in order to move the $787 billion into circulation in the economy.   The legislative leaders told the president that they were concerned about the negative impact the federal money would have on their state budgets once the stimulus money stops, but Vice President Biden, who is in charge of directing the use of the money, replied that the federal government is committed to getting the dollars into the economy immediately and they do not want state legislatures holding up on the expenditures in efforts to protect future state budgets. 

Lower-than-estimated revenue collections in February cut the state’s excess General Revenue Fund collections by more than one-half according to State Treasurer, Scott Meacham.  Receipts in February equaled $237.9 million which is $65 million (21.6%) below the prior year and $103.9 million (30.4%) below the state estimate.  Meacham said collections in the four major tax categories were below last year’s amount and the estimate.  The new information means that the state’s excess revenue has been cut by $47.3 million.  That amount is still 1.3% above the estimate on which the budget is based.  The state appropriates only 95% of the estimate so there is a built in 5% cushion.  Meacham said his office believes collections for the rest of the fiscal year will help the state avoid a shortfall, but he said “we’re going to get pretty close.

Federal Stimulus Update

In a Senate Appropriations Committee hearing, several state agencies presented information relating to the federal stimulus package, or American Recovery and Reinvestment Act.  The state received updated information on the package that indicates it will receive upwards of $2.7 billion from the federal government for use in stimulating the state’s economy. 

The 2009 legislative session kicks off on Monday, February 2, and at the top of the list of concerns to be addressed by the new legislature will be the subject of the state budget.  The following is a summary of budget issues that will be discussed in the coming four months.  A more exhaustive analysis of revenue and expenditure issues in 2009 can be found at www.OKpolicy.org