Oklahoma state budget

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Oklahoma state revenues declined almost 17% in FY2010, down approximately $945 million from FY2009.^[1] As a result, lawmakers cut state agency budgets 7.5% midway through FY2010. Then lawmakers relied on a combination of fee hikes, deferred tax credits and further cuts to state agencies to help balance the FY2011 budget.^[1] That was not, however, enough and lawmakers additionally relied on $500 million in federal stimulus money and $277 million in cash reserves to balance the FY2011 state budget.^[1]

Oklahoma will receive approximately $321 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[2]

Oklahoma has nearly $600 million in its Rainy Day Fund, but has limitations in using it to fill the budget shortfall. Three-eighths of the fund may be used to fill the 2010 mid-year gap, three-eighths may be used for the next fiscal year, and the remaining quarter may be used in a declared emergency by the Governor with a three-quarter vote of the Legislature.^[3]

See also: The Oklahoma State Budget on State Budget Solutions

[edit] Fiscal Year 2011 State Budget

Gov. Henry and legislative leaders reached a budget deal with just days remaining in the legislative session.^[4]

[edit] Revenue Issues

Oklahoma faces challenges to its plans to raise revenue in FY2011. On August 24, 2010, the Oklahoma Supreme Court found unconstitutional a new 1 percent fee on paid health care claims that was expected to generate at least $50 million in new revenue that would have drawn federal matching funds for indigent health care.^[4] The Supreme Court rejected the new insurance fee in part because it was passed during the last five days of the legislative session, which the court held violated rules for approving new taxes.^[4] In addition, a proposed traffic camera system that state budget officials expected to generate at least $50 million in revenues from tickets sent to uninsured drivers has run into roadblocks.^[5] Lawmakers were unaware that there is no central database containing all insurance records, but the governor hopes the motor vehicle insurance verification system will be operational summer 2011.^[4]

State Treasurer Scott Meacham, however, said that he did not think more state budget cuts would needed to balance the FY2011 budget despite the loss of more than $100 million in anticipated revenue.^[4] The state is only allowed to appropriate 95 percent of anticipated revenues, so there was a small cushions for such setbacks.^[5] In addition, the cuts can be avoided because of federal funds for Medicaid, increased revenue collections and carry-over money.^[4] Estimates put the amount of one-time money used to close the budget gap at approximately $1 billion.^[4]

[edit] Federal Funds

Oklahoma will receive approximately $321 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[6] The state had not included the federal funds in the FY2011 budget.^[7] Officials expected to receive approximately $193 million for Medicaid, although the federal government said the state could get as much as $203 million for Medicaid.^[7] Federal stimulus dollars for Medicaid would be shared by the Oklahoma Department of Human Services, as well as state mental health and education programs, according to a spokesperson for the Oklahoma Health Care Authority.^[7]

[edit] Summary of FY 2011 Balanced Budget

Summary of FY 2011 Balanced Budget^[8]

Category	Amount
1. Total Amount Available from Certification Packet	$5,294,829,734
2. Adjustments to Certification
One Year Moratorium on Select Tax Credits	$45,092,800
Repeal Rural Small Business Cap Credit	$37,406,000
Equalize Payments for Services	$18,701,866
Delay Motor Vehicle Apportionment Change	$16,400,000
Decouple from Federal Debt Provision	$11,620,000
Repeal Small Business Cap Credit	$11,060,000
Adopt Revised Sales Tax Vendor Discount	$9,950,000
Vending Machine Decals	$9,000,000
Reform Electric Car Credit	$9,000,000
Maximum Franchise Tax Remitters	$7,800,000
Repeal Motor Fuel Purchaser Discount	$6,100,000
Apportion Tobacco Tax Equalization Revenue to General Revenue	$4,927,000
Smokeless Tobacco Tax Equalization	$4,227,000
Collect Sales Tax on Electronically Delivered Items	$3,460,000
Sales and Use Tax Remittances	$2,998,100
Adjustment to Certification Packet	$2,700,000
Beer Wholesaler Remittance Adjustment	$1,150,000
Liquor and Wine Wholesaler Remittance Adjustment	$840,000
Multi State Model Statute	$836,000
Little Cigar Tax Equalization	$386,000
Total Revenue Enhancements	$203,654,766
3. Recover Cost of Service/Impact to Infrastructure
Oversized Weight Permits	$20,000,000
Certified Copies of Driving Records	$10,600,000
Total Cost of Service/Impact to Infrastructure	$30,600,000
4. Compliance Initiatives
Automated Enforcement of Vehicle Insurance	$95,000,000
Collect Sales Tax on Internet Sales	$95,000,000
Total Compliance Initiatives	$190,000,000
5. Bonding Initiatives
Roads and Bridges	$195,000,000
IT Equipment and Software Purchases	$38,000,000
Total Bonding Initiatives'	$233,000,000
6. Rainy Day Fund and Other Cash
Various State Agencies	$85,411,802
Rainy Day Fund (Amount Used for FY-2011 Budget)	$67,594,528
Rainy Day Fund (Amount Used for FY-2010 Supplementals and Shortfall)	$485,565,496
Excess FY-2010 Gross Production Oil to Education Funds	$42,526,218
Cash to Balance FY-2010	$(343,568,092)
Funds Added back to Education GR FY-2010	$(80,000,000)
Total Cash Transfers	$257,529,952
7. ARRA Funds
ARRA Medicaid Funds	$460,000,000
ARRA Education Funds	$236,468,872
Total ARRA Funds	$696,468,872
Total Revenue	$6,906,083,324
8. CIO Savings Initiative	$(50,000,000)
Total Savings Initiatives	$(50,000,000)
9. Targeted Cuts
Agency Consolidation Savings	$(5,360,000)
Savings from Reductions to Pass-Through Appropriations	$(8,681,000)
Total Targeted Cuts	$(14,041,000)
Total Savings Initiatives and Targeted Cuts	$(64,041,000)
Balanced Budget Summary
1. Appropriations Made by 2009 Legislature	$6,616,561,467
2. Less: FY-2009 Supplementals	$(5,750,000)
3. Less: One-Time Expenditures	$(23,525,000)
4. ARRA Education Funds Used in FY-2010 Budget	$236,352,128
5. ARRA Medicaid Funds Used in FY-2010 Budget	$404,695,751
6. FY-2010 Base Budget	$7,228,334,346
7. 7.5% General Revenue Reductions Made During FY-2010	$(385,827,878)
8. Adjusted FY-2010 Base Budget	$6,842,506,468
9. Targeted Cuts Made in FY-2011	$(65,826,045)
10. Funds Added back to Education Agencies in FY-2010	$80,000,000
11. Available Savings and Cuts	$(64,041,000)
12. Adjusted FY-2011 Base Budget	$6,792,639,423
13. Hold Debt Service Harmless and OSU-Tulsa	$5,740,532
14. Increased Certification to ODOT	$1,926,868
15. Increased Certification to CLO	$4,358,350
16. FY-2010 Supplementals	$101,418,151
17. Executive Budget Expenditures	$6,906,083,324
18. Available Revenues	$6,906,083,324
	$ 0

When state budget cuts jeopardized the jobs of two state soil scientists who aid poultry farmers, the industry donated $43,000 to the state Department of Agriculture, Food and Forestry to keep the jobs around.^[9]

[edit] Fiscal Year 2010 State Budget

Oklahoma ended FY2010 with the worst revenue shortfall in the state’s history. State Treasurer Scott Meacham said in a July 13, 2010, release, “A drop of $945 million or 17 percent in collections from the prior year illustrates the intensity of the historical downturn Oklahoma’s economy experienced.”^[10]

Summary of FY-2010 Balanced Executive Budget^[11]

Category	Amount
Revenue
1. Total Amount Available from Certification Packet	$6,755,890,998
2. Revenue Enhancement
Add Collection Fee onto Delinquent Accounts sent to Collection Agencies	$1,350,000
Adjustment to Certification Packet	$20,000,000
Certification Reduction to Authorized Fund	$9,057,649
Provide for Third Placement of Delinquent Accounts	$9,000,000
Internet Listing Of Delinquent Taxpayers	$1,700,000
Increase Vending Machine Decal Fees	$3,000,000
Sales Tax Permit Fees	$1,100,000
Fee Increases to GR	$5,643,139
Compsource Market Equalization	$8,000,000
1017 Fund Increase over Estimate for FY-2009	$24,600,000
Total Revenue Enhancements	$ 83,450,788
3. Transfers
Transfer from Cash Flow Reserve Fund	$150,000,000
Transfer from Agency Revolving Fund	$56,000,000
Total Transfers	$206,000,000
4. Efficiency Reforms
Purchasing Reform	$35,000,000
IT Consolidations	$10,000,000
Total Efficiency Reforms	$45,000,000
TOTAL REVENUE	$7,090,341,786
Expenditures
1. Appropriations Made by 2008 Legislature	$7,192,763,490
2. Less: FY-2008 Supplementals	$(103,623,566)
3. Less: One-Time Expenditures	$(22,457,255)
4. Less: One-Time Revenues	$(123,983,090)
5. Governor	$(139,343)
6. Lieutenant Governor	$(33,091)
7. Agriculture Cabinet	$(3,430,160)
8. Commerce/Tourism Cabinets	$7,245,965
9. Education Cabinet	$39,535,543
10. Energy/Environment Cabinet	$(4,413,640)
11. Finance and Revenue Cabinet	$(7,232,891)
12. Health Cabinet	$110,200,467
13. Human Resources and Administration Cabinet	$(2,538,416)
14. Human Services Cabinet	$2,536,627
15. Military Cabinet	$(162,266)
16. Safety and Security Cabinet	$630,630
17. Science and Technology	$(5,579)
18. Secretary of State Cabinet	$3,062,792
19. Transportation Cabinet	$(30,296)
20. Veterans' Cabinet	$(21,008)
21. Legislature	$(2,120,189)
22. Judiciary	$(889,375)
23. FY-2009 Supplementals	$5,400,000
Total Recommended Expenditures	$7,090,295,348
Balance / (shortage) of funds available	$46,439

[edit] Budget Background

The Oklahoma state fiscal year begins July 1 and ends June 30. On October 1 all of the state's agencies submit their budget requests to the Governor and the Legislature. The Governor presents his proposed budget the first Monday in February. From February through April state officials deliberate on the proposed budget. By early June the Governor evaluates any and all changes before a final decision is approved.^[12]

The Oklahoma Policy Institute notes that, "Oklahoma's state and local governments face a long-term fiscal gap in which ongoing revenues will not be enough to pay ongoing spending commitments. The fiscal gap results from rapidly increasing health care costs, an aging population, and commitments for employee and retiree benefits."^[13]

[edit] Budget figures

The following table provides a history of Oklahoma's expenditures and gross domestic product (GDP).

Fiscal Year	Expenditures (billions)	GDP (billions)
2000	$15.9 [14]	$89.8 [14]
2001	$18.3 [14]	$94.3 [14]
2002	$20.7 [14]	$97.2 [14]
2003	$20.8 [14]	$103.5 [14]
2004	$20.8 [14]	$111.5 [14]
2005	$22.0 [14]	$120.8 [14]
2006	$23.9 [14]	$130.1 [14]
2007	$26.0 [14]	$140.2 [14]
2008	$28.3 [14]	$149.2 [14]
2009	$30.8* [14]	$159.8* [14]

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Oklahoma state budget (2008-2009) for more information.

[edit] Accounting Principles

Main article: Oklahoma government accounting principles

The Oklahoma State Auditor and Inspector audits state and local agencies in the state, publishing its audit reports online. The Oklahoma State Auditor and Inspector is a statewide elected position serving a 4-year term. The office of Examiner and Inspector and the State Auditor was consolidated in a special election on July 22, 1975. Steve Burrage was appointed to the position by Gov. Henry on July 10, 2008 after the June 16, 2008 resignation of Jeff A. McMahan under indictment for accepting improper cash and gifts from an Oklahoma businessman.^[15][16]

The Institute for Truth in Accounting (IFTA) rates Oklahoma “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Oklahoma's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[17] Oklahoma's CAFRs are annual publications of the Oklahoma Office of State Finance and prepared by the Division of Central Accounting and Reporting. The Oklahoma State Comptroller directs the daily operations of the Division of Central Accounting and Reporting. Brenda Bolander is Oklahoma's State Comptroller and Michael Clingman is Director (appointed by the Governor and approved by the Senate) of the Oklahoma Office of State Finance.^[18]

Credit Rating	Fitch	Moody's	S&P
Oklahoma[19]	AA	Aa3	AA+

[edit] Budget Transparency

Oklahoma OpenBooks is the name of the publicly available website created by the Oklahoma government. It discloses information about Oklahoma's spending and budget, and is managed by the Office of State Finance. It is one of the few state websites that passes all five criteria of the Sunshine Review's transparency checklist.

Sign up for the showmethespending.com weekly transparency e-updates. As transparency news about Oklahoma becomes available, it will be sent out by email and posted here.

[edit] Government tools

The Oklahoma OpenBooks page provides a searchable database of state expenditures and revenues. How often the Office of State Finance updates the database varies, depending upon the type of information being updated. For example, payroll and expenditures information is updated monthly, whereas the list of vendors is updated annually.^[20]

The following table is helpful in evaluating the level of transparency provided by Oklahoma OpenBooks:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Oklahoma OpenBooks

For further information, see

• Oklahoma OpenBooks, official Web site.

See also: Evaluation of Oklahoma state website

[edit] Limitations and Suggestions

The site should post line-item expenditures.

[edit] Public employee salaries

Information about public employee salaries is available here.

[edit] Economic Stimulus Transparency

• Oklahoma received an estimated $1,878,254,929 from the American Recovery and Reinvestment Plan of 2009.^[21]

• The economic recovery website to show how legislators and government officials in Oklahoma are spending Federal funds is available here.

One Oklahoma project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave Boynton, Oklahoma nearly $90,000 to replace a quarter-mile stretch of sidewalk that was replaced only five years ago and leads to a ditch.^[22]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[23][24]

Oklahoma has five Congressional Districts, yet ARRP has given $1 million to its 6th District. The 6th District was eliminated by the 2000 census.

The state’s non-existent 51st District received $10.6 million in stimulus funds. In all, the phantom districts accrued more than $19 million, used to create or save 15 jobs. This amounts to nearly $1.3 million per job.^[25]

[edit] See Also

Oklahoma taxpayer-funded lobbying

[edit] External links

• State Budget Solutions, Oklahoma
• Oklahoma Council of Public Affairs
• Oklahoma OpenBooks, official website
• Oklahoma Office of State Finance
• Study of State Budget Gaps
• Oklahoma Government spending
• Model transparency legislation from the American Legislative Exchange Council is available at this link.

[edit] Additional reading

• Gov. Brad Henry's State of the State Address 2009
• News On 6,"Lawmakers to Meet and Discuss State Budget Crisis," January 3, 2010

[edit] References

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	v • d • e State of Oklahoma Oklahoma City (capital)
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