OKLAHOMA CITY – State lawmakers announced a budget deal Monday that cuts most state agencies by about 4 percent, earmarks $160 million for Medicaid expansion and reduces --- and then replaces -- funds for the common education system.
The legislative slight-of-hand was part of a $7.7 billion budget for fiscal year 2021. The agreement, outlined in several budget bills, is expected to be heard by both houses of the legislature this week.
Speaking at a press conference Monday, Senate Pro Tempore Greg Treat said the state had avoided catastrophic cuts that were predicted by some officials.
“This is a far better budget than many expected and that should come as a relief to the citizens who rely on core services and the agencies that serve them,” Treat, R-Oklahoma City, said.
The deal comes at the same time many Oklahoma businesses are slowly reopening their doors after being locked down to fight the Covid-19 pandemic. The ongoing battle against the coronavirus, coupled with a historic drop in the price of crude oil have hammered the state’s budget.
Documents released Monday show the FY 21 budget should be about 3 percent less than the FY 20 budget. Treat said the agreement uses reserve funds, one-time spending cuts and the redirection of non-appropriated money to plug the $1.4 billion hole predicted by Gov. Kevin Stitt.
Still, while most state agencies will see some reduction in their budgets, Monday’s announcement was also a ‘bad news/good news’ moment for the common education system.
The bad news: Under the agreement, Treat said the state Department of Education would see a 2.5 percent reduction – about $78.2 million – in funding for next year.
The good news: Though the state is cutting some funding, about $200 million in federal Covid-19 funds will fully offset the state’s spending cuts. In addition, the recent teacher pay increase will not be impacted.
Senate budget chairman Roger Thompson, R-Okemah, said lawmakers kept their promise to protect education. “We are not letting a virus roll back historic investments Oklahoma has made in education in the past few years,” he said.
House Speaker Charles McCall said lawmakers have worked remotely for several weeks to craft the budget.
“The budget is the responsibility of the legislature,” he said. “A year ago, nobody anticipated the Covid-19 situation that has disrupted our state’s economy and has disrupted the people of Oklahoma’s health.”
McCall said it was the legislature’s duty to stabilize the fiscal picture of the state “to the best of its ability and he had terse words for Republican Governor Kevin Stitt. The legislature’s Republican leadership, already frustrated with Stitt over the FY20 budget, said the governor walked away from FY21 budget negotiations in March.
In a joint statement issued Monday, both McCall and Treat called on Stitt to “use the strong management skills he pledged to bring to government” to address the budget.
“We expect Governor Stitt will make good use of his proven business acumen to help agencies maintain service levels to the public,” McCall said. And while Thompson, the budget chair, confirmed that legislative leaders used the funding projections supplied by Stitt to build the budget, Thompson also called those projections ‘circumspect.’
“We still remain circumspect about the data used to create the executive branch’s predictions, but we worked off their numbers,” he said. “We will consider supplemental appropriations to restore some of these reductions if revenues improve as we expect them to.”
House Democrats called the agreement disappointing -- not because of the Covid-19 pandemic but due to a clash of egos.
“While the governor sits on $800 million in federal funding, the legislature is constructing a budget that cuts government agencies like education and human services, takes money away from the pensions of police officers, teachers, firefighters, and public employees, and leaves Oklahomans more vulnerable to future pandemics,” Minority Leader Emily Virgin, D-Norman, said. “We are doing this based on a revenue model created by the governor’s office, but we have not been allowed to view how they actually came up with the number.”
Virgin said Stitt should stop playing political games during a pandemic and “use the money allocated to Oklahoma to fund state government.”
“If he (Stitt) believes the $1.3 billion shortfall, then he should release the formula of how he came up with the number so we can have a better understanding of what the executive branch sees,” she said. “Oklahomans shouldn’t suffer because of political power struggles between the legislature and the governor. This governor likes to remind people why Oklahomans elected him. I can say with some certainty that they didn’t elect him to cut government when he could prevent it.”
The Oklahoma Legislature has until May 29th to finish its work.