Meacham: Revenue failure not likely
BY BARBARA HOBEROCK World Capitol Bureau
Thursday, April 02, 2009
4/02/09 at 7:54 PM
OKLAHOMA CITY — State Treasurer Scott Meacham doesn’t foresee a revenue failure for the current fiscal year.
But senators have asked agencies to provide information about the impact of a 1 percent reduction in their 2009 budget.
Meacham, Gov. Brad Henry’s chief budget negotiator, said the state has a $297 million cushion for the current fiscal year.
That cushion includes $47 million in revenue collections through February, which have exceeded the budget estimate, and another $250 million in reserve funds.
Lawmakers can only appropriate 95 percent of available revenue collections. The remainder goes into reserve.
Meacham said talk of a revenue failure before the current fiscal year ends on June 30 are premature.
“Not at this point,” Meacham said. “Things could get worse before the end of the fiscal year. Based upon what we are seeing today, we don’t see that happening.”
If a revenue failure occurs, agencies would have to take across-the-board cuts until spending is brought in line with actual revenue collections, Meacham said.
Senate President Pro Tem Glenn Coffee, R-Oklahoma City, said based on his discussions with Senate Appropriations Chairman Mike Johnson, R-Kingfisher, a revenue failure “is very possible.”
“For that reason, we have explored at least the possibility of discussing across-the-board cuts in this fiscal year budget,” Coffee said. “No decision has been made about that. Certainly, there is no agreement with the House or governor about that. But we have explored that and are looking into that.”
Coffee said if cuts occur, some agencies are in a better position to withstand reductions than others.
Johnson said if cuts are needed for the current fiscal year, a decision must be made quickly.
“It is not fair to agencies to give them a cut in the last month,” Johnson said. “This is not a plan. This is just looking at different scenarios.”
Coffee said agencies are better equipped in April to make reductions as opposed to late May, when they have less cash to manipulate.
If cuts are necessary, Coffee said, he sees agencies renegotiating contracts rather than reducing personnel.
Agencies have also been asked to provide impact statements for 5 percent and 10 percent cuts for fiscal year 2010 as the Legislature and governor’s office work on the state’s next budget.
State Treasurer Scott Meacham