- Associated Press - Thursday, March 3, 2016

OKLAHOMA CITY (AP) - Oklahoma finance officials on Thursday announced another $235 million in cuts amid the sharp drop in oil and natural gas prices, saying schools, prisons and other state agencies will see their budgets slashed by 7 percent for the rest of the year.

Public schools alone will have nearly $110 million cut from their budgets for the fiscal year that ends June 30.

State Secretary of Finance Preston Doerflinger ordered the cuts - on top of previous reductions of 3 percent that began in January - and warned lawmakers about the seriousness of the state’s finances. Lawmakers are facing a $1.3 billion budget hole for the upcoming fiscal year, which Doerflinger said could result in cuts “right through the bone.”

“The governor and legislative leaders recognize the severity of the situation and are working on solutions, but I’m convinced there are still rank and file legislators who have yet to grasp the seriousness of the challenge at hand,” Doerflinger said in a statement. “This deepened cut isn’t pleasant and should serve as a reality check and call to action for anyone who thinks this problem fixes itself with short term budget gimmicks.”

Collections from every major source of revenue in Oklahoma have fallen short of projections amid the sharp drop in oil and gas prices, prompting the mid-year reductions. Oil and gas production is among the top revenue sources for the state, along with income and sales taxes.

“With oil prices off their 2014 peak by some 70 percent and our state’s anchor industry in the midst of correction, we have apparently not yet found the bottom and continue to see the spillover effect in all major revenue streams,” state Treasurer Ken Miller said.

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