Oklahoma state budget (2008-2009)

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State Information


In February Gov. Brad Henry announced that Oklahoma's budget situation was "not good news" - a $900 million shortfall for FY 2010. However, in his budget proposal for FY 2010, Henry suggested cuts in a number of state agencies, with the exception of education, public safety and transportation.[1] But even with budget cuts in the future, Gov. Henry said that he did not anticipate furloughs or layoffs. Most state legislators said that they were opposed to using the state's "Rainy Day Fund."[2] House Speaker Chris Benge called the budget shortfall "an opportunity to make more efficient use of the money we are currently spending."[1]

In August 2009 state officials announced that because of a continued decline in state revenue all state agencies would receive a 5% cut in budget allocations.[3]

Impact of budget woes

See also: State budget crisis, 2009-2010
  • In January Oklahoma unemployment numbers revealed that approximately 84,000 claims were processed in the month of December, a 5,000 claim increase from November.[4] But despite the rapid increase in Oklahoma's unemployment rate, 4.8 percent in December, it was still below the national average of 7.6 percent, according to the Oklahoma Employment Security Commission.[5] In November Oklahoma's rate was at 4.9 percent, 0.8 percent higher than the rate in December 2007. Since December 2007 the state had seen an approximately one percent increase in non-farm employment.[5][6]
  • In February the governor announced that, in light of the state's budget deficit, cuts would need to be made across the board, including travel expenses, for example, for the state's university and college system. Rep. Ken Miller said that travel was "one of the first places to look," particularly during a "lean year." In order to prevent increases in tuition, state regents requested $80 million in additional funds for FY 2010.[7]
  • Oklahoma's department of environmental protection was facing a 20 percent cut and the water resources board was facing a 25 percent cut. Duane Smith, Oklahoma water resources' board executive director, said the cuts would require fee increases. "Some of these fees have not been increased in 20, 30 years," he added.[8]

Budget background

See also: Oklahoma state budget

The Oklahoma state fiscal year begins July 1 and ends June 30. On October 1 all of the state's agencies submit their budget requests to the governor and the legislature. The governor presents his proposed budget the first Monday in February. From February through April state officials deliberate on the proposed budget. By early June the governor evaluates any and all changes before a final decision is approved.[9]

According to an analysis by Americans for Prosperity, in 1996, Oklahoma’s entire state budget was $3.4 billion. In 2008, the education budget alone was $3.8 billion.[10] The budget for fiscal year 2009 totaled $7.1 billion.[11]

Budget figures

The following table provides a history of Oklahoma's expenditures and gross domestic product (GDP).

Fiscal year Expenditures (billions) GDP (billions)
2000 $15.9[12] $89.8[12]
2001 $18.3[12] $94.3[12]
2002 $20.7[12] $97.2[12]
2003 $20.8[12] $103.5[12]
2004 $20.8[12] $111.5[12]
2005 $22.0[12] $120.8[12]
2006 $23.9[12] $130.1[12]
2007 $26.0[12] $140.2[12]
2008 $28.3[12] $149.2[12]
2009 $30.8*[12] $159.8*[12]
  • NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.

Ideas about why the crisis occurred

  • August 2009 revenue reports revealed that July 2009 revenue totaled $336.7 million, approximately 26.3%, or $120.4 million, less than a year ago. July revenues were $74.4 million (18.1%) below earlier 2009 estimates.[3]
  • Oklahoma experienced a loss of $610 million in revenues and approximately $180 million in one-time revenue sources. Also, federal money for the state's Medicaid program and programs like the teachers' program had also declined.[13]
  • According to reports, there were approximately $12 million dollars in uncollected taxes.[7]
  • On February 19 Rep. Richard Morrissette said that Senate staff raises were "absolutely excessive" and that the pay raises for Senate Republican leadership and legal counsel were not right when other state employees hadn't received pay raises in years.[14] However, Senate Pro Tempore Glen Coffee said in a statement that his current staff was smaller and earned nearly $113,000 less in compensation than former Senate Pro Tempore Mike Morgan's. Raises for Coffee's staff ranged from approximately $2,000 to $17,164.[14]

Proposed actions

Governor Brad Henry

According to Gov. Henry's proposed budget, $7 billion, he suggested a balanced budget that equaled approximately $102.5 million less than the then-current budget and an additional $300 million in budget cuts.[15][13] Potential reforms included a 10 percent cut in travel for all public safety agencies, with the exception of law enforcement.[7] The governor all suggested efficiency reforms, which he said could result in $45 million in savings. In addition, Henry said that he would like to step up efforts to collect money owed from delinquent taxpayers that would in turn result in approximately $12 million in savings.[7] According to state treasurer Scott Meacham, cuts would be made in all agencies with the exception of education, public safety, transportation and health care.[1]

Republicans

Despite Oklahoma's impending deficit, Republican lawmakers said that they would prefer not to use the "rainy day fund" just yet. In February, House Speaker Chris Benge said, "I've seen in the past when previous legislatures had appropriated Rainy Day (money) prematurely." Glen Coffee, Senate President Pro Tempore, said that he also agreed with Benge's point.[13] The "Rainy Day Fund" totaled approximately $600 million.[16] Some Republicans said that they were wary of President Barack Obama's stimulus package and said that it was important to make all of the necessary cuts. "We must be careful to not overcommit these dollars for recurring expenditures that can't be covered once the funds are depleted," said House appropriations chairman Ken Miller and Felecia Jones.[1]

Democrats

On February 18 the Oklahoma Democratic Party announced that they were launching an "aggressive campaign" to inform citizens on key state issues and how Republicans weren't addressing problems appropriately. For example, Rep. Richard Morrissette said that he was concerned about continued pay raises in the state senate.[17][18] Democratic Party Chairman Ivan Holmes said that President Barack Obama's economic stimulus bill would "help Oklahoma tremendously."[18]

Economic stimulus package

Oklahoma was expected to receive $2.6 billion of the $787 billion dollar economic stimulus package.[19] According to White House officials, the package was expected to create approximately 40,000 jobs.[20]

According to preliminary reports, Oklahoma was expected to receive:[21][22]

  • $460 million towards highway and bridge projects
  • $136 million towards schools that had low income students
  • $147 million towards special education
  • $7.1 million for technology improvements
  • $900 million towards Medicaid funding
  • $470 million towards the state fiscal stabilization fund

Budget transparency

Oklahoma OpenBooks is the name of the publicly available transparency website created by the Oklahoma government. It discloses information about Oklahoma's spending and budget, and is managed by the Office of State Finance. It was one of the few state websites that passed all five criteria of the Sunshine Review's transparency checklist.

Legislation

  • Oklahoma Senate Bill 1, Taxpayer Transparency Act

The cost of creating the Oklahoma OpenBooks website was approximately $40,000. The website was paid for out of existing Office of State Finance funds, staff and through achieved efficiencies. A few members of the Office of State Finance Information Services Division and Administrative Division staff were used on a part-time basis, in addition to the services of the company that manages the state's website.

Government tools

The Oklahoma OpenBooks page provides a searchable database of state expenditures and revenues. How often the Office of State Finance updates the database varies, depending upon the type of information being updated. For example, payroll and expenditures information is updated monthly, whereas the list of vendors is updated annually.[23]

The following table is helpful in evaluating the level of transparency provided by Oklahoma OpenBooks:

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary
Oklahoma OpenBooks Y
600px-Yes check.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
Y
600px-Yes check.png

Limitations and suggestions

The site should post line-item expenditures, which it did not as of 2009.

Support for database

In addition to the original sponsors and cosponsors of Oklahoma Senate Bill 1, various individuals and organizations promoted the creation of this database.

The concept of transparency received support from Governor Brad Henry in his State of the State address from February 2007. He stated then:

Every Oklahoman deserves to know how their tax dollars are spent. This year, I ask for your help in establishing an easily accessible website in which citizens can see exactly how their money is spent. We demand accountability of state agencies and departments, and it's only fair that voters demand accountability from us.[24]

U.S. Senator Tom Coburn advocated the bill's passage, saying that, "The only reason to oppose transparency and openness in government would be if you had something to hide. I hope the governor will support transparency and openness in government and quickly sign state Senate Bill 1 into law."[25]

Groups such as the National Taxpayers Union and Americans for Tax Reform supported creation of the database, as well.[26][27]

Public employee salaries

See also: Oklahoma state government salary

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[28]
  • Oklahoma was expected to receive an estimated $1,878,254,929.[29]

See also

External links

Additional reading

References

  1. 1.0 1.1 1.2 1.3 Associated Press, "State revenue shortfall $612 million,"February 17,2009
  2. Tulsa World, "Budget shortfall confirmed," February 18,2009
  3. 3.0 3.1 Associated Press, "Oklahoma schools dealing with 5 percent budget cut," August 12, 2009
  4. KTUL, "Workforce Oklahoma Struggling As Unemployment Numbers Rise," January 29,2009
  5. 5.0 5.1 Tulsa World, "State unemployment rate rises," January 28,2009
  6. OESC, "Oklahoma's state unemployment continues rising in December," January 27,2009
  7. 7.0 7.1 7.2 7.3 News OK, "Where would Oklahoma budget cuts come from?," February 3,2009
  8. Associated Press, "Oklahoma's environmental agencies face big cuts," February 9,2009
  9. Oklahoma Open Books, "overview of the process" accessed February 19,2009
  10. The Oklahoman, "How much was enough?," November 22, 2008
  11. Oklahoma office of state finance, "FY 2009 budget," February 4,2009
  12. 12.00 12.01 12.02 12.03 12.04 12.05 12.06 12.07 12.08 12.09 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 US Government spending, "Oklahoma state and local spending," accessed February 20,2009
  13. 13.0 13.1 13.2 NewsOK, "Oklahoma budget picture to be clearer," February 15,2009
  14. 14.0 14.1 News OK, "Oklahoma Democrat fights Senate staff raises," February 19,2009
  15. Oklahoma Office of State Finance, "FY2010 Executive Budget,"February 2,2009
  16. Oklahoma Finances, "Open Books,"accessed February 19,2009
  17. News OK, "Oklahoma Democrat fights Senate staff raises," February 19,2009
  18. 18.0 18.1 KSBI-TV, "OK Democrats Aggressively Campaign,"February 18,2009
  19. KJRH, "The economic stimulus package passed, so what did it mean for Oklahoma?," February 15,2009
  20. The White House, "American Recovery and Reinvestment Act:State by state jobs impact," February 13,2009
  21. Tulsa World, "New projects awaited," February 18,2009
  22. Associated Press, "Impact of stimulus on Oklahoma budget uncertain," February 19,2009
  23. How to Use OpenBooks
  24. Governor Brad Henry's State of the State Address, February 5, 2007
  25. Dr. Coburn Comments on State Taxpayer Transparency Act, June 4, 2007
  26. An Open Letter to Oklahoma Governor Brad Henry: Sign the Taxpayer Transparency Act, May 31, 2007
  27. Let The Sunshine In!, March 9, 2007
  28. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  29. Wall Street Journal, "Stimulus Spending by State," March 12,2009