- Associated Press - Sunday, March 6, 2016

OKLAHOMA CITY (AP) - The officials who run Oklahoma’s state agencies say they are running out of ways to insulate core programs from major budget cuts after steep mid-year revenue failures and an expected $1.3 billion shortfall next year.

At risk are services to the poor, the disabled, the elderly and children. Even long-term highway projects like bridge and road repairs are in danger of being delayed amid a 7 percent budget cut through the end of the fiscal year June 30.

“I think this is hopefully going to get the attention of the Legislature, how serious the situation is and how important it is to look at off-the-top funding, looking at our tax credits, and again make sure everybody is sharing in the pain that we’re going through and not putting everything on the backs of our core agencies,” said state Senate President Pro Tem Brian Bingman, R-Sapulpa.

Legislators meeting at Oklahoma City this year are reviewing a network of tax incentives and exemptions that total in the billions of dollars but have yet to settle on a plan for 2016-17.

At the state agencies, there’s still this year to worry about.

“This is just almost unprecedented,” said Sheree Powell, the spokeswoman for the state Department of Human Services. “If we can manage this year to shield programs and services, I don’t know how we’re going to do that next year, to be honest.”

In an energy-dependent state blindsided by plummeting oil prices, the Oklahoma DHS has so far avoided significant cuts to core programs through a series of targeted workforce reductions and service contracts, Director Ed Lake said.

But Thursday’s 4 percent revenue cut - on top of a mid-year 3 percent cut - may change how the agency delivers services for poor families, children, the elderly and the disabled, among other groups, Lake said.

Coming when it does - with less than four months left in the fiscal year - the budget cut means some agencies will have to live on 18 percent less money between now and June 30. The impact on public schools is a 16.5 percent cut, prompting suggestions that rural schools hold classes four days a week instead of five.

Officials have until the end of the week to provide the Office of Management and Enterprise Services a plan to address the following question: How will agencies cut their expenditures?

“As I stand here today, I can’t answer that,” Lake said Friday. “Today, we don’t have enough reductions to get to the $25 million (in cuts to human services). We’re very rapidly trying to figure that out.”

Another round of voluntary buyouts of employees is a likely option, Lake said. But the workforce reductions and other options discussed to this point wouldn’t fully make up the gap.

The Oklahoma Health Care Authority, which administers the state’s Medicaid program, has already reduced provider rates in response to the last round of mid-year cuts. The agency will likely lower provider rates again no sooner than June 1, a month before the end of the fiscal year, spokeswoman Jo Kilgore said.

Although the authority has not seen a significant decline in Medicaid providers, lower rates can place a strain on some providers, Kilgore said.

The state Department of Transportation expects the cuts could cause delays in some of the department’s long-term projects, including expenditures on equipment and bridge and road repair.

But DHS doesn’t have as much wiggle room after offering about 575 employee buyouts in the last two fiscal years, with more almost certainly on the horizon.

“Just about everything is on the table for us, whether it’s personnel or services or the extent to which we are funding certain services,” Lake said. “We are looking at everything we do.”

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