Oklahoma House passes $6.78 billion budget, Legislature adjourns for year

May 28--The Oklahoma House of Representatives on Friday passed and sent to the governor a $6.78 billion budget that will cut overall state spending by 5 percent in the fiscal year starting July 1.

The House later joined the Senate in adjourning for the year. The next legislative session begins in February.

Gov. Mary Fallin is expected to sign the budget bill next week. It calls for cuts of 11 percent to public safety, 15.9 percent to higher education and 4 percent to the Department of Human Services, while generally preserving funding for common education, Corrections and the Oklahoma Health Care Authority.

State officials say some agencies will reduce public services and colleges will likely increase tuition.

The spending plan passed the House, 52-45.

"It was a very productive session," House Speaker Jeff Hickman said. "The members had to make tough decisions.

"We were able to keep schools and nursing homes open, and that was a public concern.

"It was a tough session with historic financial problems."

Minority leader

House Democratic Leader Scott Inman gave the legislative session a "C."

He was disappointed that some of the money to balance the budget came from the working poor.

Inman has been critical of a reduction in an earned income tax credit that will affect low-income wage earners. He has also urged without success that the Legislature reverse a small income tax reduction that went into effect Jan. 1.

"The best thing is that you finally had a Republican majority, which had been bent on slashing revenue under the false myth of supply side economics, finally came to their senses that you can't cut your way to prosperity," he said.

Revenue issues

Oil industry declines combined with increasing tax breaks and a decreasing state income tax rate have resulted in budget problems the last two years.

This session, the Legislature was faced with a $1.3 billion shortfall in revenue needed to put together a new budget maintaining current spending levels.

Lawmakers were able to close about $300 million of that gap by reducing tax breaks and boosting tax collection efforts. They used bonds to fill another $200 million of the shortfall. Other money came from a cash reserve account known as the Rainy Day Fund and from agency savings, or revolving funds.

Health care

Aside from financial issues, concerns over medical care for Oklahomans dominated discussions at the state Capitol this year.

Rep. Doug Cox, R-Grove, a medical doctor, said lawmakers missed a big opportunity by declining to advance legislation in support of a plan by the Oklahoma Health Care Authority to utilize federal funds to help cover many low-income people without medical insurance.

The proposal was hand-tooled to be specific to the state's needs and to complement the work of the well-regarded Insure Oklahoma program. About $900 million in yearly federal funds were identified.

Fallin, Hickman and other Republican leaders were supportive, but conservatives labeled it "Obamacare," and opposition grew. A House panel cleared the proposal, but it never got out of a Senate committee.

"We're going to have to get over this aversion to taking federal money for health care," Cox said.

Tax Plan

Cox's bill to raise the cigarette tax by $1.50 per pack to help maintain Medicaid provider rates also failed after House Democrats voted against it as a group. They said they would have supported it if Republicans had supported the health care expansion.

Fallin said she was "disheartened" this didn't pass.

"Smoking is Oklahoma's leading cause of preventable death. Lawmakers approving an additional $1.50 per pack would have been the most important thing we could have done to improve Oklahoma's health ranking," the governor said.

Other revenue-gathering efforts also failed to advance, including proposals to broaden sales and use taxes as well as to increase taxes on gasoline and alcohol.

Without the new and continuing revenue, the budget relies heavily on so-called "one-time money," or funds that may not be available next year.

That means lawmakers will likely face a revenue shortfall of more than $600 million when they begin drawing up the next budget in 2017.

"I can't help but feel we missed an opportunity to do more to reform our budget process and consolidate agencies," Fallin said. "We still need to do more to address structural imbalances in the state's budget, fix problematic tax policies and make available more recurring, stable revenue."

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