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How Oklahoma’s New Budget Hole Formed and What Might Fill It

  • Joe Wertz

Drewgstephens / Flickr

Lawmakers hope state tax revenues continue growing and fills a $150 million budget hole.

Oklahoma’s revenues are up, and Office of State Finance officials expect lawmakers will have more state funds to appropriate next year.

The latest estimate is that Oklahoma will have about $6.5 billion available for appropriation next fiscal year, and that the state revenue collections will be about $400 million more than they were a year ago.

So why is the state still facing what Finance Director Preston Doerflinger described to The Oklahoman as “huge budget gaps?”

The Board of Equalization is meeting today to certify the amount of funds available for FY 2013. Gov. Mary Fallin will use today’s certification to craft her executive budget, which she gives to the Legislature when it convenes in February. The Board of Equalization will meet again in February to update the estimate for the legislative session.

The projected FY 2013 budget is a 1.8 percent increase than what the Legislature appropriated in FY 2012.

Last year, lawmakers were looking at a $500 million budget shortfall, but managed to balance the budget by using about $500 million in one-time funds, which included $357 in special cash appropriations and $113 in federal stimulus funds for the state’s Medicaid program.

Those funds aren’t available this year, and the state is looking at a $150 million hole, said Doerflinger, who also serves as Fallin’s finance secretary.

This is an estimate, of course, and general revenue collections are about 5.7 percent higher than those estimated for the current fiscal year, reported Shawn Ashley with eCapitol News.

If the trend continues, the shortfall could be erased by the next revenue certification in February, Doerflinger told The Oklahoman’s Michael McNutt:

“I certainly think February’s numbers will be better,” Doerflinger said. “Ideally, it would be completely made up, but I’m not sure that that will be the case.”

Filling the budget hole will leave lawmakers with a relatively flat 2012 budget, but Doerflinger said it would still be possible to reduce the state income tax through savings in consolidating agencies and eliminating some tax credits in the crosshairs of a legislative panel.