Budget Agreement Contains Targeted Cuts

The recent state budget deal still calls for significant cuts, but one-time money—federal stimulus funds and Rainy Day Fund money—helped avert a devastating catastrophe.

The $6.6 billion budget will mean 5 to 7 percent cuts for many state agencies in fiscal year 2011. This comes after huge cuts this fiscal year. Some agencies, such as Common Education, Higher Education, Public Safety, Corrections and Mental Health Services will receive smaller cuts, ranging from 0.5 to 3.3 percent.

David Blatt, director of the Oklahoma Policy Institute, recently wrote about the reality facing state agencies:

Many agencies will be facing additional cuts of 5 to 7 percent in FY ‘11 on top of the 10 to 14 percent cuts already enacted in FY ‘10. Even agencies that have been cut less than the full 15 to 20 percent will face severe challenges in fulfilling their fundamental missions with reduced resources, particularly given mandatory increases for employee health care and retirement costs, general inflation, and in some cases, new mandates and growing caseloads.

Blatt also pointed out that the use of one-time money pushes the budget problem “further down the road,” although continued revenue growth could help. What does this mean for the 2012 and 2013 budgets?

According to a press release, Gov. Brad Henry, who has spent his last year in office dealing with the state’s financial crisis, had this to say about the budget agreement:

In the face of a historic revenue shortfall, this was a very difficult and painful budget to craft, but I am proud that we were able to strike an agreement that largely protects the core services that are so important to Oklahomans and the state’s economic recovery. All levels of public education and our classroom teachers in particular play such an important role in this state’s economic future that it was critical to shield them from the deepest cuts, and we did that.