Budget Agreement No Reason For Celebration

It’s important to point out the recent announcement of a state budget deal for this remaining fiscal year doesn’t mean all is well with Oklahoma’s finances.

As the OK Policy Blog points out:

First, even with the injection of well over $1 billion in stimulus and Rainy Day Funds to buttress the FY ‘10 budget, the cuts agencies are facing this year are having serious and worsening effects on public services over a wide swath of state government. Many agencies that took 5 – 7 percent cuts going into FY ‘10 are now looking at 12 – 15 percent cuts compared to last year’s budget, while even those agencies that were spared steep cuts going into the year are reducing or eliminating core services.

The blog, which is part of the Oklahoma Policy Institute, also points out the agreement between Gov. Brad Henry and legislative leaders left out some key details about how the 2010 budget would be balanced. According to the blog:

Given projected shortfalls of $809 million and cuts of $295.5 million, the question that still needs to be sorted out is where exactly the $513.5 million in additional revenue needed to bring the FY ‘10 budget into balance will come from. The leadership announcement remained short on details.

In a media release about the budget deal, Henry said, “Given the magnitude of the crisis we face, there really were no good options available to us.”

According to the release:

As part of their budget pact, state leaders have agreed to assign priority status to K-12 schools, higher education, the Oklahoma Health Care Authority and the Department of Corrections, and provide each agency with a supplemental appropriation.

Will the pact hold up? The legislature convenes Feb. 1.

Another pressing issue is how the state will deal with a predicted $1.3 billion budget shortfall for next year. How much can you cut in a state that already is notorious in the nation for underfunding public education?