Lawmakers overcome budget hurdle for 2010, but daunting task remains for next year’s budget

Budget outlook for 2011 remains bleak

OKLAHOMA CITY — Despite a last-minute maneuver by Senate Democrats that threatened to derail a plan to plug a massive hole in Oklahoma’s budget this year, an agreement was worked out that sent the budget bills to Gov. Brad Henry, who signed the package late last week.

Now, an even more daunting task begins for state leaders, who must craft a budget for the fiscal year that begins July 1 with about $1.2 billion less to spend than last year.

Without any new sources of revenue, House Speaker Chris Benge said last week, agency budgets would have to be slashed in the neighborhood of 10 percent across the board to cover that gaping hole, even after using federal stimulus money and $223 million from the state’s Rainy Day Fund.

“If we use all those reserves, we are still facing a 10 percent cut for everyone, every agency,” said Benge, R-Tulsa. “I say that to show how daunting the task is that we have before us.”

If lawmakers maintain a pledge to try and ease cuts for education, transportation and public safety, that would result in even deeper cuts to other areas of government.

After the flap late last week when Senate Democrats held up the budget fix and cried foul over their lack of involvement in the negotiations and cuts to senior nutrition programs, the Democratic governor warned that balancing a budget for next year likely will be even more difficult.

“I appreciate the hard work of Democratic and Republican lawmakers, but this is just the first step of a very challenging budget process,” Henry said. “To protect the core services that are critical to Oklahomans, we will have to make some very difficult and possibly unpopular decisions in the days and weeks to come.”

At the start of the session, Henry proposed several revenue-raising measures, including fee hikes, agency consolidations, enhanced sales tax collections, a moratorium on select income tax credits and a transportation bond issue.

Leaders in the GOP-controlled House and Senate have signaled a willingness to consider some of those plans, and already some of the agency-consolidation measures have cleared the House.

Benge indicated there are a lot of House members interested in eliminating or suspending at least some of the estimated $5.5 billion in expenditures by the state each year.

But even if legislative leaders can agree on some revenue enhancements, Benge warned, the short-term outlook for state government in Oklahoma is bleak.

“I don’t think state government will look the same as it did last year or even like it looked in February when we came into session, because of the revenue picture and what appears to be a likelihood of a slow recovery,” he said.