Two state officials are on different pages when it comes to chances that a dedicated education fund will fail this year.
Both agree, however, that additional education cuts are coming, partly because a separate fund likely will fail.
On Tuesday, about a month after state schools Superintendent Joy Hofmeister told districts to brace for a $19 million shortfall tied to a dedicated education fund, officials at the Office of Management and Enterprise Services told the Tulsa World the fund has an extra $44 million in it that should float it to the end of the year.
In a joint statement with OMES on Wednesday, however, Education Department spokeswoman Steffie Corcoran said Hofmeister is less optimistic the fund will make it.
Yet OMES spokesman John Estus said the account, called the “1017 fund,” needs to fall short by 10 percent each month for the remainder of the year in order to fail.
“That’s unlikely, but we are in a volatile situation right now,” Estus said. “Conventional wisdom could go out the window.”
Meanwhile, another education fund that is fed solely by oil and gas tax revenue will fail by the end of the year, officials from both the OMES and Education Department said.
The Common Education Technology Fund was budgeted to bring in $47.3 million this fiscal year, but will fall short by up to $15 million, OMES said.
As with the 1017 fund, the technology fund money goes into the state’s financial aid formula.
Hofmeister has repeatedly warned districts to prepare for more cuts.
In January, $47 million was chopped from common education as part of a statewide cut to balance the budget after the state Board of Equalization declared a revenue failure in December. A blanket 3 percent cut was needed to offset $177 million in lost revenue.
The board also said the 1017 fund could fall short by $19 million, but that projection did not include nearly $44 million in leftover funding that was not spent during fiscal 2015.
The board only looks at current incoming revenue, and does not look at carryover or reserve balances when making its projections, Estus said.
Common education and all other state programs face another round of midyear budget cuts next month that are tied to the failure of the state’s general revenue fund. Those cuts will be an extension of the cuts made earlier this year.
In December, state Secretary of Finance Preston Doerflinger said the state’s revenue failure was due to the drop in the oil and gas industry. Other groups and lawmakers have put more emphasis on the state’s cutting income taxes and providing tax breaks and business incentives.
The 1017 fund is doing better financially than many other funds because of the diversity of its revenue stream, Estus said.
The fund is projected to bring in $729 million this fiscal year. That is expected to drop to $679 million in fiscal 2017, but the Legislature can take action to mitigate the decline, such as shifting money or finding more revenue, he said.
The fund is fed by various sources, including personal and corporate income taxes, sales and use taxes, tribal and horse track gaming revenue, tobacco taxes, specialty license plate sales, and oil and gas revenue. Money in the fund is authorized by the Legislature but not allocated out of the general revenue fund; instead it goes into the state’s education funding formula, which distributes money to school districts on a per-pupil basis.
