Balanced budget?
“We have come to a place in our state where there are no reserves at all.” ~Joy Hofmeister, Oklahoma Superintendent of Public Instruction
“We need new revenue.” ~ Preston Doerflinger, Oklahoma Finance Secretary
At the end of session last year, May 27, 2016, the Legislature adjourned with a balanced budget for fiscal year 2017 which began on July 1, 2016. The approval of a balanced budget is a constitutional requirement in Oklahoma.
On February 6, 2017, a new legislative session began with a money problem. Legislators faced a reduction in funds available for crafting the FY 2018 budget by $860 million, in large part due to the use of one-time-funds which were used to balance the previous year’s budget.
In response, on the first day of session in her State of the State address, the Governor outlined a series of tax increases to raise revenue. Her budget proposal included increasing taxes on cigarettes, gasoline, and expanding the sales tax to include 164 services in an effort to raise revenue.
Unfortunately, the first month of session will end with a larger money problem and little consensus from state and legislative leaders.
Last week, the Finance Secretary announced a revenue failure for the current budget year which ends on June 30th meaning $34.6 million in cuts to agencies beginning March 1st, and schools learned that there is a $39.2 million shortfall in the 1017 Fund.
These failures are occurring in spite of the balanced budget that the state agencies have been working under.
The Board of Equalization also announced that there would actually be $878 million less available for next year’s budget.
In addition, the Governor is facing a mutiny of her own Lt. Governor and over 25 Legislators publicly opposed to her revenue proposals.
This does not bode well for the citizens of Oklahoma.
As I have repeatedly stated in this column and in public appearances, having a balanced budget is not a panacea. The way in which a budget is balanced is much more important.
For years, our leaders have used one-time sources of revenue and reserves (savings accounts) in order to present a balanced budget. This has obscured the fact that the state has been operating with a revenue and tax incentive/credit problem much larger than has been publicly acknowledged.
The time has come, now that ‘there are no reserves’, for our leaders to get serious about the revenue picture of this state, be honest with their fellow Oklahomans, and produce a balanced budget that works for all citizens of this great state.
I appreciate the opportunity to represent you in Oklahoma’s House and keeping you informed on the issues. Please let me know if you have questions, comments, or if I can be of any assistance.
You may reach me by calling 1-800-522-8502, emailing chuck.hoskin@okhouse.gov; or writing to me at Representative Chuck Hoskin, 2300 N. Lincoln Blvd., Room 509, Oklahoma City, OK 73105. You can also find me on Facebook.