State's budget deficit biggest
BY RANDY KREHBIEL World Staff Writer
Sunday, December 20, 2009
12/20/09 at 4:06 AM
Only a few months removed from being declared "recession-proof" by the national press, Oklahoma faces the largest state budget deficit in the nation, according to a report by the National Conference of State Legislatures.
The NCSL's November update of state budgets says Oklahoma's 18.5 percent shortfall for the current fiscal year edges out Arizona's 18 percent, with Illinois in third at 16.5 percent.
All told, states pared $145.9 billion from their fiscal year 2010 budgets compared with 2009. For most states, the fiscal year begins on July 1.
In addition, 36 states have reported additional shortfalls for 2010 totaling $28.2 billion.
Through the first five months of the current fiscal year, Oklahoma's general revenue fund receipts are 28.5 percent below the same period a year ago and 24.3 percent below projections — a shortfall of $577.5 million.
At that rate, general fund revenues will fall more than $1.1 billion short of projections.
Officials announced Tuesday that December's general fund allocations would be 10 percent less than budget amounts — a figure double the 5 percent cuts already in place.
Senate President Pro Tem Glenn Coffee, R-Oklahoma City, said the revenue declines would "reduce the size of state government for the next few years."
Coffee would not predict the form those reductions will take, however.
"I don't know what the answer to that is," he said.
State agencies seemed stunned by the announcement. Already grappling with worker furloughs and cuts in services, some said they were not sure how they will deal with further reductions.
"We're still analyzing it," said a Department of Corrections spokesman, Jerry Massie. The DOC, more reliant than most agencies on general fund revenues, has already had a round of early retirements and is furloughing employees. Although the prison population has grown by 500 in the last five months, the department work force is at three-quarters of its authorized strength.
"We'll be looking at cancelling drug and alcohol treatment contracts, reduction in force, more furlough days, and we may have to look at closing some of the smaller facilities," Massie said.
Tulsa County District Attorney Tim Harris said his staff is already stretched thin and overworked.
"I don't think they know how a district attorney's office works," Harris said. "If you take away one of my assistants, there's not another one just waiting in the wings to take their place."
According to a District Attorneys Council report to the governor last month, a 10 percent cut such as the one announced Tuesday could mean fewer prosecutions and curtailment of such things as drug courts and community sentencing.
Lauri Monetti, a spokeswoman for the Department of Human Services, said the additional cuts threaten programs that have been protected to this point because of the federal matching money they bring in.
"Initially," Monetti said, "we'll make cuts in one-time expenditures. If this additional reduction continues, though, the effect will be more significant."
Although Oklahoma has $600 million in its "rainy day" fund and a similar amount available in federal stabilization funds, $235 million of that is already obligated to repay cash "borrowed" from other state accounts.
And legislative leaders and Gov. Brad Henry are reluctant to dig too deeply into the reserve and stabilization money because no end of the downturn is in sight.
Some observers, in fact, predict that the worst is still ahead. Only one state — Vermont — reported an uptick in economic activity in 2009.
In addition, some Republican legislators have said that they view the revenue failure as an opportunity to make deep, permanent cuts in state government, although none has said exactly what should be eliminated.
Randy Krehbiel 581-8365