- Associated Press - Thursday, December 17, 2015

OKLAHOMA CITY (AP) - A projected $900 million hole in next year’s state-appropriated budget is expected to grow closer to $1.1 billion when adjusted for one-time expenditures that were used to plug a hole in the current state budget, state fiscal leaders confirmed on Thursday.

Oklahoma’s Secretary of Finance Preston Doerflinger also announced that cuts to state agencies as a result of the projected revenue failure in the current fiscal year likely will range from between 2 percent and 4 percent.

The State Board of Equalization is expected to certify on Monday that the Legislature will have about $900 million, or nearly 13 percent, less to spend on the budget for the Fiscal Year 2017 budget that begins July 1. But that figure doesn’t include $150 million taken from the state’s Rainy Day Fund or about $77 million tapped from various state agency revolving accounts, said Sen. Clark Jolley, chairman of the Senate Appropriations Committee.

Doerflinger, who is Gov. Mary Fallin’s chief budget negotiator, held a press briefing Thursday with Jolley and House Speaker Jeff Hickman to discuss how leaders are bracing for the rocky fiscal times that they blamed mostly on the decline in the oil and natural gas industry.

“I think the three of us are absolutely confident that the February numbers are just going to make that hole bigger,” said Jolley, referring to a final certification the Board of Equalization will make at the start of the legislative session next year. “We expect it to be a worse projection.”

Among the ideas that state leaders already are discussing are voluntary buyouts for some state employees, and eliminating or reducing some of the hundreds of millions of dollars’ worth of tax incentives the state pays out each year. Hickman and Jolley said lawmakers also will look at restricting some of the so-called “off-the-top” revenue that is diverted directly to pay for various programs like scholarships and road and bridge construction.

All three state officials remained committed to a reduction in the state’s individual income tax rate from 5.25 percent to 5 percent that is scheduled to take effect Jan. 1. The cut is expected to cost the state $57 million in the current fiscal year that ends June 30, and about $147 million annually after that.

While GOP leaders blamed the state’s looming fiscal crisis on the crash of the oil and gas industry, critics have argued that much of the problems are self-inflicted as a result of a steady reduction in the income tax and an increase in subsidies and tax breaks for businesses and industry.

“It’s extremely disappointing that our legislative leaders, the very people who created the fiscal crisis we’re in, are blaming everyone but themselves,” Alicia Priest, the president of the Oklahoma Education Association, said in a statement.


Follow Sean Murphy at www.twitter.com/apseanmurphy .

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