Oklahoma state budget (2010-2011)

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Oklahoma's $6.7 billion state budget for FY2011 was approved in May 2010[1] and was $400 million less than the previous budget.[2] State revenues declined almost 17% in FY2010, down approximately $945 million from FY2009.[3] As a result, lawmakers cut state agency budgets 7.5% midway through FY2010. Then lawmakers relied on a combination of fee hikes, deferred tax credits and further cuts to state agencies to help balance the FY2011 budget.[3] That was not, however, enough and lawmakers additionally relied on $500 million in federal stimulus money and $277 million in cash reserves to balance the FY2011 state budget.[3]

Oklahoma received approximately $321 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[4][5]

Oklahoma had nearly $600 million in its Rainy Day Fund, but the state faced limitations in using it to fill the budget shortfall. Three-eighths of the fund could be used to fill the 2010 mid-year gap, three-eighths could be used for the next fiscal year, and the remaining quarter could be used in a declared emergency by the Governor with a three-quarter vote of the Legislature.[6]

Oklahoma had a total state debt of $17,254,404,041 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[7]

2011 State spending & deficit in billions[8]
Total spending Healthcare Education Protection Transport Human services Gen government
$6.7 $1.1 $3.6 $.65 $.2 $.69 $.46
2011 Local spending & deficit in billions[9]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$16.9 $0.1 $1 $6.6 $0.3 $1.3 $1.2 $9.8

Fiscal Year 2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government online.[10]

Gov. Henry and legislative leaders reached a budget deal with just days remaining in the legislative session and with later cuts the budget ended up at $6.9 billion, which was $400 million less than the budget for FY2010.[11][2]

At the end of the fiscal year, the state deposited $249 million into its Rainy Day Fund, which was $30 million more than estimated.[12]

Rainy Day Fund

As of Jan. 23, 2011, the state's Rainy Day Fund had a balanced of $2.03. One year prior to that, it contained $596.6 million.[13] Because limits were placed on how much money can be withdrawn, lawmakers during the previous session withdrew $100 million from the Rainy Day Fund and put it in an account so it would be available for the session starting Feb. 7, 2011.[13]

Revenue Issues

Oklahoma faced challenges to its plans to raise revenue in FY2011.

A report released by the Oklahoma Policy Institute in December 7, 2010, predicted that the state would have $400 million less to spend in the coming fiscal year compared to the then-current fiscal year.[14]


On August 24, 2010, the Oklahoma Supreme Court found unconstitutional a new 1 percent fee on paid health care claims that was expected to generate at least $50 million in new revenue that would have drawn federal matching funds for indigent health care.[11] The Supreme Court rejected the new insurance fee in part because it was passed during the last five days of the legislative session, which the court held violated rules for approving new taxes.[11] In addition, a proposed traffic camera system that state budget officials expected to generate at least $50 million in revenues from tickets sent to uninsured drivers ran into roadblocks.[15] Lawmakers were unaware that there was no central database containing all insurance records, but the governor hoped the motor vehicle insurance verification system would be operational summer 2011.[11]

State Treasurer Scott Meacham, however, said that he did not think more state budget cuts would needed to balance the FY2011 budget despite the loss of more than $100 million in anticipated revenue.[11] The state was only allowed to appropriate 95 percent of anticipated revenues, so there was a small cushion for such setbacks.[15] In addition, the cuts could be avoided because of federal funds for Medicaid, increased revenue collections and carry-over money.[11] Estimates put the amount of one-time money used to close the budget gap at approximately $1 billion.[11]

Federal Funds

Oklahoma received approximately $321 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[16] The state did not include the federal funds in the FY2011 budget.[17] Officials expected to receive approximately $193 million for Medicaid, although the federal government said the state could get as much as $203 million for Medicaid.[17] Federal stimulus dollars for Medicaid were shared by the Oklahoma Department of Human Services, as well as state mental health and education programs, according to a spokesperson for the Oklahoma Healthcare Authority.[17][5]

Summary of FY 2011 Balanced Budget

See also: Archived Oklahoma state budgets

Summary of FY 2011 Balanced Budget[18]

Category Amount
1. Total Amount Available from Certification Packet $5,294,829,734
2. Adjustments to Certification
One Year Moratorium on Select Tax Credits $45,092,800
Repeal Rural Small Business Cap Credit $37,406,000
Equalize Payments for Services $18,701,866
Delay Motor Vehicle Apportionment Change $16,400,000
Decouple from Federal Debt Provision $11,620,000
Repeal Small Business Cap Credit $11,060,000
Adopt Revised Sales Tax Vendor Discount $9,950,000
Vending Machine Decals $9,000,000
Reform Electric Car Credit $9,000,000
Maximum Franchise Tax Remitters $7,800,000
Repeal Motor Fuel Purchaser Discount $6,100,000
Apportion Tobacco Tax Equalization Revenue to General Revenue $4,927,000
Smokeless Tobacco Tax Equalization $4,227,000
Collect Sales Tax on Electronically Delivered Items $3,460,000
Sales and Use Tax Remittances $2,998,100
Adjustment to Certification Packet $2,700,000
Beer Wholesaler Remittance Adjustment $1,150,000
Liquor and Wine Wholesaler Remittance Adjustment $840,000
Multi State Model Statute $836,000
Little Cigar Tax Equalization $386,000
Total Revenue Enhancements $203,654,766
3. Recover Cost of Service/Impact to Infrastructure
Oversized Weight Permits $20,000,000
Certified Copies of Driving Records $10,600,000
Total Cost of Service/Impact to Infrastructure $30,600,000
4. Compliance Initiatives
Automated Enforcement of Vehicle Insurance $95,000,000
Collect Sales Tax on Internet Sales $95,000,000
Total Compliance Initiatives $190,000,000
5. Bonding Initiatives
Roads and Bridges $195,000,000
IT Equipment and Software Purchases $38,000,000
Total Bonding Initiatives' $233,000,000
6. Rainy Day Fund and Other Cash
Various State Agencies $85,411,802
Rainy Day Fund (Amount Used for FY-2011 Budget) $67,594,528
Rainy Day Fund (Amount Used for FY-2010 Supplementals and Shortfall) $485,565,496
Excess FY-2010 Gross Production Oil to Education Funds $42,526,218
Cash to Balance FY-2010 $(343,568,092)
Funds Added back to Education GR FY-2010 $(80,000,000)
Total Cash Transfers $257,529,952
7. ARRA Funds
ARRA Medicaid Funds $460,000,000
ARRA Education Funds $236,468,872
Total ARRA Funds $696,468,872
Total Revenue $6,906,083,324
8. CIO Savings Initiative $(50,000,000)
Total Savings Initiatives $(50,000,000)
9. Targeted Cuts
Agency Consolidation Savings $(5,360,000)
Savings from Reductions to Pass-Through Appropriations $(8,681,000)
Total Targeted Cuts $(14,041,000)
Total Savings Initiatives and Targeted Cuts $(64,041,000)
Balanced Budget Summary
1. Appropriations Made by 2009 Legislature $6,616,561,467
2. Less: FY-2009 Supplementals $(5,750,000)
3. Less: One-Time Expenditures $(23,525,000)
4. ARRA Education Funds Used in FY-2010 Budget $236,352,128
5. ARRA Medicaid Funds Used in FY-2010 Budget $404,695,751
6. FY-2010 Base Budget $7,228,334,346
7. 7.5% General Revenue Reductions Made During FY-2010 $(385,827,878)
8. Adjusted FY-2010 Base Budget $6,842,506,468
9. Targeted Cuts Made in FY-2011 $(65,826,045)
10. Funds Added back to Education Agencies in FY-2010 $80,000,000
11. Available Savings and Cuts $(64,041,000)
12. Adjusted FY-2011 Base Budget $6,792,639,423
13. Hold Debt Service Harmless and OSU-Tulsa $5,740,532
14. Increased Certification to ODOT $1,926,868
15. Increased Certification to CLO $4,358,350
16. FY-2010 Supplementals $101,418,151
17. Executive Budget Expenditures $6,906,083,324
18. Available Revenues $6,906,083,324
$ 0

When state budget cuts jeopardized the jobs of two state soil scientists who aid poultry farmers, the industry donated $43,000 to the state Department of Agriculture, Food and Forestry to keep the jobs around.[19]

Fiscal Year 2010 State Budget

Oklahoma ended FY2010 with the worst revenue shortfall in the state’s history. State Treasurer Scott Meacham said in a July 13, 2010, release, “A drop of $945 million or 17 percent in collections from the prior year illustrates the intensity of the historical downturn Oklahoma’s economy experienced.”[20]

Summary of FY-2010 Balanced Executive Budget[21]

Category Amount
Revenue
1. Total Amount Available from Certification Packet $6,755,890,998
2. Revenue Enhancement
Add Collection Fee onto Delinquent Accounts sent to Collection Agencies $1,350,000
Adjustment to Certification Packet $20,000,000
Certification Reduction to Authorized Fund $9,057,649
Provide for Third Placement of Delinquent Accounts $9,000,000
Internet Listing Of Delinquent Taxpayers $1,700,000
Increase Vending Machine Decal Fees $3,000,000
Sales Tax Permit Fees $1,100,000
Fee Increases to GR $5,643,139
Compsource Market Equalization $8,000,000
1017 Fund Increase over Estimate for FY-2009 $24,600,000
Total Revenue Enhancements $ 83,450,788
3. Transfers
Transfer from Cash Flow Reserve Fund $150,000,000
Transfer from Agency Revolving Fund $56,000,000
Total Transfers $206,000,000
4. Efficiency Reforms
Purchasing Reform $35,000,000
IT Consolidations $10,000,000
Total Efficiency Reforms $45,000,000
TOTAL REVENUE $7,090,341,786
Expenditures
1. Appropriations Made by 2008 Legislature $7,192,763,490
2. Less: FY-2008 Supplementals $(103,623,566)
3. Less: One-Time Expenditures $(22,457,255)
4. Less: One-Time Revenues $(123,983,090)
5. Governor $(139,343)
6. Lieutenant Governor $(33,091)
7. Agriculture Cabinet $(3,430,160)
8. Commerce/Tourism Cabinets $7,245,965
9. Education Cabinet $39,535,543
10. Energy/Environment Cabinet $(4,413,640)
11. Finance and Revenue Cabinet $(7,232,891)
12. Health Cabinet $110,200,467
13. Human Resources and Administration Cabinet $(2,538,416)
14. Human Services Cabinet $2,536,627
15. Military Cabinet $(162,266)
16. Safety and Security Cabinet $630,630
17. Science and Technology $(5,579)
18. Secretary of State Cabinet $3,062,792
19. Transportation Cabinet $(30,296)
20. Veterans' Cabinet $(21,008)
21. Legislature $(2,120,189)
22. Judiciary $(889,375)
23. FY-2009 Supplementals $5,400,000
Total Recommended Expenditures $7,090,295,348
Balance / (shortage) of funds available $46,439

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 was approved.[22]

The Oklahoma Policy Institute notes that, "Oklahoma's state and local governments face a long-term fiscal gap in which ongoing revenues would not be enough to pay ongoing spending commitments. The fiscal gap results from rapidly increasing health care costs, an aging population, and commitments for employee and retiree benefits."[23]

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[24] $89.8[24]
2001 $18.3[24] $94.3[24]
2002 $20.7[24] $97.2[24]
2003 $20.8[24] $103.5[24]
2004 $20.8[24] $111.5[24]
2005 $22.0[24] $120.8[24]
2006 $23.9[24] $130.1[24]
2007 $26.0[24] $140.2[24]
2008 $28.3[24] $149.2[24]
2009 $30.8*[24] $159.8*[24]

Accounting principles

See also: Oklahoma government accounting principles

The Oklahoma State Auditor and Inspector audits state and local agencies in the state, publishing its audit reports online. The Oklahoma State Auditor and Inspector was a statewide elected position serving a 4-year term. The office of Examiner and Inspector and the State Auditor was consolidated in a special election on July 22, 1975. Steve Burrage was appointed to the position by Gov. Henry on July 10, 2008 after the June 16, 2008 resignation of Jeff A. McMahan under indictment for accepting improper cash and gifts from an Oklahoma businessman.[25][26][27]

The Institute for Truth in Accounting (IFTA) rates Oklahoma “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Oklahoma's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[28] Oklahoma's CAFRs were annual publications of the Oklahoma Office of State Finance and prepared by the Division of Central Accounting and Reporting. The Oklahoma State Comptroller directs the daily operations of the Division of Central Accounting and Reporting. Brenda Bolander was Oklahoma's State Comptroller and Michael Clingman was Director (appointed by the Governor and approved by the Senate) of the Oklahoma Office of State Finance.[29][30]

Credit Rating Fitch Moody's S&P
Oklahoma[31] AA Aa3 AA+

Budget transparency

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

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 was updated monthly, whereas the list of vendors was updated annually.[32]

The following table was 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
See also: Evaluation of Oklahoma state website

Limitations and Suggestions

The site should post line-item expenditures.

Public employee salaries

Information about public employee salaries was available on the state website.[33]

Economic stimulus transparency

  • Oklahoma establised an economic recovery website to show how legislators and government officials in Oklahoma were spending Federal funds.[35]

One Oklahoma project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave Boynton, Oklahoma nearly $90,000 to replace a quarter-mile stretch of sidewalk that was replaced only five years ago and leads to a ditch.[36]

See also

Oklahoma government sector lobbying Oklahoma state budget Oklahoma public pensions

External links

Additional reading

References

  1. [1]
  2. 2.0 2.1 The Oklahoman "2010 Oklahoma Governor's race: New governor to face still budget challenges" Oct. 3, 2010
  3. 3.0 3.1 3.2 Businessweek "Treasurer: Brighter days ahead for Okla. economy" July 14, 2010
  4. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  5. 5.0 5.1 H.R. 1586
  6. The Edmond Sun, "Skimpy revenue dims state budget picture," October 15, 2009
  7. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  8. Governor's Office, FY 2011 Budget
  9. USA Spending, State Guesstimated* Government Spending
  10. FY 2011 Budget
  11. 11.0 11.1 11.2 11.3 11.4 11.5 11.6 Businessweek "Okla. leaders optimistic despite budget setbacks" Aug. 25, 2010
  12. MSNBC.com "Revenue boosts deposit to Okla. reserve fund" Aug. 8, 2011
  13. 13.0 13.1 NewsOK.com "State savings account down to $2" Jan. 23, 2011
  14. The Oklahoman "Report says Oklahoma would have $400M less in coming fiscal year " Dec. 7, 2010
  15. 15.0 15.1 NewsOK.com "Delay in contract award may harm Oklahoma revenues" Aug. 1, 2010
  16. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  17. 17.0 17.1 17.2 "Bailout cushions state Medicaid" Aug. 11, 2010
  18. FY2011 Budget Book
  19. NewsOK.com "Poultry industry gives $43K to Oklahoma" Aug. 24, 2010
  20. The City Wire "Arkansas' budget issues less severe than most states" August 2, 2010
  21. FY2010 Budget Book
  22. Oklahoma Open Books, "overview of the process" accessed February 19,2009
  23. Oklahoma Policy Institute, "Oklahoma Policy Institute's Online Budget Guide," October 2009
  24. 24.00 24.01 24.02 24.03 24.04 24.05 24.06 24.07 24.08 24.09 24.10 24.11 24.12 24.13 24.14 24.15 24.16 24.17 24.18 24.19 US Government spending, "Oklahoma state and local spending," accessed February 20,2009
  25. Oklahoma State Auditor and Inspector Web site, accessed November 6, 2009
  26. NewsOK, "McMahan resigns; impeachment off," June 16, 2008
  27. audit reports
  28. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  29. Oklahoma Office of State Finance Web site, accessed November 6, 2009
  30. CAFRs
  31. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  32. How to Use OpenBooks
  33. Oklahoma Open Books
  34. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  35. Oklahoma Economic Recovery
  36. "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010