As the Oklahoma legislature wraps up its sixth week in special session, only one bill has made it to Governor Mary Fallin’s desk. The House of Representatives and Senate passed a bill to appropriate $23.3 million from the state’s “rainy day fund” for the Oklahoma Department of Mental Health and Substance Abuse Services.
eCapitol reports the Department of Mental Health and Substance Abuse Services lost $75 million, approximately 23 percent of its annual appropriations, when the Oklahoma Supreme Court ruled the tobacco cessation fee unconstitutional.
Combined, the Department of Human Services, the Oklahoma Health Care Authority and the Department of Mental Health and Substance Abuse Services, are facing a loss of $215 million.
Dick Pryor: This is a special session edition of Capitol Insider. I'm Dick Pryor with eCapitol news director Shawn Ashley, who is at the State Capitol. Shawn, legislators have been in special session for six weeks now. They've approved $23 million for Mental Health and Substance Abuse Services. But that is still $52 million less than the agency needs. And DHS and the Health Care Authority also need more funding. What is the plan heading into week seven?
Shawn Ashley: It's really unclear at this point. Negotiators continue to talk about how to approach a resolution to the $215 million shortfall, combined, that the three agencies are facing. Senate Majority Floor Leader Greg Treat indicated on Thursday, talks are now turning towards possible cuts. The question being whether those would be across the board or whether they would be strategic or targeted. Now there are a couple of other pieces of legislation that would address these issues. The House has passed bills appropriating just over $29 million to each of the agencies you mentioned. The Department of Human Services, the Oklahoma Health Care Authority and the Department of Mental Health and Substance Abuse Services. But the Senate has yet to take those up. The Senate also has not taken up a measure that would generate some additional revenue by changing the gross production tax incentive rates on so-called legacy wells, some older wells that participate in that program.
Dick Pryor: So how much money does it appear legislators will be able to find to appropriate to those three agencies that are facing those huge budget shortfalls?
Shawn Ashley: Well, it really depends on who you ask. The House is convinced that with those measures that spend the FY 2017 carry over money, and account for about $29 million per agency, along with the rainy day fund money, as well as the approximately $50 million in the gross production tax on the legacy wells, and another $30 million they say is available from various agency revolving funds. They suggest that they have filled 70 percent of that $215 million hole. But once again, the only piece of legislation that has passed through both chambers and is awaiting the governor's action is the appropriation from the rainy day fund to the Department of Mental Health and Substance Abuse Services, $23.3 million of the $75 million that they need.
Dick Pryor: But even if they get the 70 percent that still means that there would be cuts and Governor Fallin has said that she would veto more cuts. Has she changed her position on that?
Shawn Ashley: I think the governor has changed her position and it was one of those things that sort of snuck by us when she joined with Republican legislators a few weeks ago to announce what was then appeared to be a grand bargain, the increase of tobacco taxes, of low-point beer taxes and of the motor fuel tax. If you'll recall that plan only generated about $170 million, leaving a gap of some $55 million there. Lawmakers then were planning to tap money from the rainy day fund and then that left between $15 million and $20 million that they would have to fill some other way. Representative Kevin Wallace, chair of the House Appropriations and Budget Committee, said on the floor when that bill was considered that he had not yet agreed to any any cuts, but he acknowledged that there was some additional hole that would have to be filled. So if the governor had bought into that plan, she had also bought into the potential of certain cuts, going back on her suggestion earlier that she would veto any plan for cuts.
Dick Pryor: And now, making this even more complicated is the state health department. Preston Doerflinger has replaced Terry Cline on an interim basis as commissioner, as the state auditor began an audit of the agency's finances. And Preston Doerflinger says the agency is running out of money. He calls it a "desperate situation." They need $30 million to fix their budget.
Shawn Ashley: That's right. And that's one of the issues that I think the Senate is looking at as they consider whether to spend money from 2017. The $87 million of carryover money that the House would like to appropriate to each of those three agencies--if they spend that money now, they won't have it when the Department of Health needs it in the spring. So there's a balancing act that has to take place there. And some decisions that are made now in the special session will affect probably what happens in the regular session in February of 2018.
Dick Pryor: Shawn Ashley, thank you. That's Capitol Insider. If you have questions, e-mail us at email@example.com or contact us on Twitter @KGOUnews. Until next time, with Shawn Ashley, I'm Dick Pryor.