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Fallin, Leadership Reach Oklahoma Budget Deal; Common Ed Flat, Higher Ed Cuts

May 19, 2015

A little over two weeks before the constitutionally required deadline for Oklahoma lawmakers to wrap up the legislative session, Gov. Mary Fallin and leaders of the House and Senate announced a budget deal Tuesday afternoon.

The $7.1 billion budget is just over one percent less than the current fiscal year, and closes a $611 million shortfall by tapping the Rainy Day Fund, state agency revolving accounts, and the Unclaimed Property Fund.

"Under this budget agreement, approximately 51 cents of every dollar appropriated by state government will continue to go toward education," Fallin said in a statement. "The budget also protects and in some cases increases funding for health and public safety while preserving all funding necessary to keep intact the state’s eight year transportation plan as well the five year county road and bridge plan."

Senate President Pro Tem Brian Bingman and House Speaker Jeff Hickman stressed the budget doesn't affect the Oklahoma Department of Transportation's eight-year roads and bridge plan.

No Hike For Common Education, Higher Ed Faces Cuts

State lawmakers unveiled a fiscal year 2016 budget Tuesday that would keep funding for common education flat but cut appropriatons for colleges and universities by $24.1 million.

Oklahoma's common education system would receive $2.484 billion, the same amount it received in 2015. The state's CareerTech education system would see a 3.5 percent decrease in its budget, about $4.8 million.

Oklahoma Watch is a nonprofit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. More Oklahoma Watch content can be found at www.oklahomawatch.org

Legislative leaders finalized the $7.187 billion budget deal following weeks of difficult negotiations. "In light of the money issues we were facing, it's a good budget," said Preston Doerflinger, state Secretary of Finance.

House Speaker Jeff Hickman, R-Fairview, said the agreement for the 2016 fiscal year budget is $37 million less than last year's budget. However, the new budget also includes $48.7 million in supplemental appropriations for fiscal year 2015.

Hickman said the agreement includes an $18 million increase in funding for the Oklahoma Health Care Authority, a $14 million increase for the Department of Corrections and a $2 million increase for the Department of Mental Health and Substance Abuse Services.

In addition, the Department of Public Safety would receive an extra $4.6 million to cover the cost of pay increases for state troopers, which was authorized last year. The office of Juvenile Affairs would get an extra $2.5 million for operation costs.

The budget would earmark $15.9 million to fund the state's Pinnacle Plan. The plan is aimed at improving the foster care system. Yet even with that increase, the Department of Human Services, which oversees the foster care system, would have its total budget shaved by about 0.5 percent.

Three other agencies --  the Department of Rehabilitative Services, the Oklahoma School of Science and Math and the Oklahoma Ethics Commission -- would see their budgets increase by modest amounts.

House Budget Chairman Rep. Earl Sears, R-Bartlesville, said lawmakers used more than $589 million in agency and reserve funds to fill the budget hole. Sears said lawmakers took $150 million from the "rainy day" fund, $50 million from the unclaimed property fund and $121 million from the cashflow reserve fund to partially fill the $611 million budget gap.

Lawmakers also used $50 million from the County Improvement Roads and Bridges fund, $31.4 million from the Oklahoma Tax Commission's compliance initiative program, $24.4 million in funds that were made available by changes in the Workers' Compensation insurance premium tax and $8.5 million from the Tax Commission's fraud initiative program.

The legislature also set caps on several funding programs, including the County Improvement Roads and Bridges fund and the Tourism sales and use tax program. Those  changes generated about $30 million which was used to fill the budget hole. The remainder of the gap would be covered by agency spending reductions, Hickman said.

Some agencies will see budget cuts of up to 7.25 percent.

Teacher Pay Hike Likely Won't Happen This Year

Shawn Hime, executive director of the Oklahoma State School Boards Association, said the state budget deal announced Tuesday means Superintendent Joy Hofmeister’s push to increase teacher pay and expand the school year is temporarily dead.

Hofmeister’s plan called for raising teacher pay by $5,000 over five years, including $1,000 next year, and increasing the school year by five days.

Oklahoma has the lowest teacher pay in the region and one of the lowest nationally.

“We want to find a long-term solution to help teachers with compensation,” Hime said. “The teacher shortage is the number one concern right now.”

Hime said flat funding means less money will make it into the classroom because districts’ fixed operational costs are going up.

If the state sees another large bump in new students, that means there will be less money per student.

Hime said the budget does include $28.3 million in supplemental property tax funding meant to help districts balance their budgets for the current year.

That money is provided through a state program that covers the revenue that districts and counties lose due to property tax exemptions used to attract new businesses.

Overall, Hime said there was little surprising in Tuesday’s announcement.

“The governor and legislative leaders promised to hold common education funding flat, and that’s what they did,” he said.

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