No state budget cuts?

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April 2, 2009

Anonymous The Stillwater News Press Thu Apr 02, 2009, 05:58 PM CDT

OKLAHOMA CITY — Gov. Brad Henry's top financial adviser said Thursday he sees no need at this time for the Legislature to cut agency budgets for the current fiscal year.

State Senate budget subcommittees have been asking agency directors how they could handle a 1 percent reduction in their budgets this year and cuts of 5 percent to 10 percent next year.

The possibility of budget cuts caused concern in a Senate subcommittee on Wednesday. State School Superintendent Sandy Garrett said a 1 percent cut between now and the end of fiscal year ending June 30 would be "very devastating" to schools and could cause personnel actions.

Meacham said that despite an 8.5 percent drop in revenue collections in last month's revenue report, he does not expect a revenue failure before the start of a new fiscal year July 1.

He said the state still has about a $250 million cushion to meet monthly allocations to agencies.

"Obviously, I will know more next week when we see new numbers, but based upon what we are seeing so far, we feel there is not going to be a current-year revenue failure," Meacham said.

A revenue failure occurs when the state runs out of reserve funds and does not collect enough money in a month to cover scheduled allocations to agencies.

If that happens, the Oklahoma Constitution dictates that all agencies are cut across the board by a percentage that will make up the shortfall.

The last revenue failure was in 2003 after Henry started his first term in office and faced a budget shortfall of about $700 million. Before that, the last revenue failures were after the collapse of the energy industry in the early 1980s.

Senate Appropriations Committee Chairman Mike Johnson, R-Kingfisher, said a decision will be likely made next week on whether there will be any budget cuts this fiscal year.

He said one reason lawmakers have entertained the idea is to save money to soften the blow of significant budget cuts that will have to be made for the next fiscal year.

"The second thing is it makes agencies try to be more conservative in their spending for the rest of the year," he said.

Johnson said he was "not a strong proponent" of the 1 percent cut, but "if we need to do it, we need to do it pretty quickly."

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No state budget cuts?

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