School Funding Cuts Expected to Deepen

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Another $19 million could be cut from Oklahoma’s public schools as early as next month, potentially raising the total mid-year revenue reduction to $66 million.

The additional cut would fall on top of $47 million in cuts enacted last week by the state Board of Education, acting on advice from state schools Superintendent Joy Hofmeister.

Shawn Hime, director of the Oklahoma State School Boards Association, said if additional cuts occur, as projected by the state Board of Equalization, he would not be surprised to see layoffs at schools. State Schools Superintendent Joy Hofmeister last week predicted that some schools could close.

The additional cut would come from a fund called the “Lottery, Education Reform Revolving Fund.” It is fed by various sources, including personal and corporate income taxes, sales and use taxes, tribal and horse track gaming revenue, tobacco taxes and specialty license plate sales. Money in the fund is authorized by the Legislature but not allocated out of the general revenue fund; instead it goes into the state’s education funding formula, which distributes money to school districts on a per-pupil basis.

The fund was budgeted this year for $738.6 million, but began falling short in November, said John Estus, spokesman for the Office of Management and Enterprise Services. In December, the Board of Equalization projected a $19 million shortfall in the fund for the year, which Estus said would have to be matched by a comparable budget cut.

The reduction approved by the Board of Education last week included $25 million in cuts from the state’s funding formula, or about $23 per pupil. The additional cut would bring the total loss to about $39 a student.

Regarding layoffs at schools, Hime, of the school boards association, said, “The formula itself is money that schools use for day-to-day operations. That’s teacher salaries, support staff salaries, utilities and other overhead.”

It’s unclear whether lawmakers will use the state’s reserve fund, commonly called the “rainy day fund,” to offset any of this year’s mid-year budget cuts. That fund has $385 million.

Last week’s education board action was spurred by a 3 percent cut ordered to all state agencies in December to offset $177 million in lost revenue.

State Secretary of Finance Preston Doerflinger at the time said the state’s revenue failure was due to the low cost of oil. Other groups and lawmakers have put more emphasis on the state cutting income taxes and providing tax breaks and business incentives.

Rep. Earl Sears, R-Bartlesville, said lawmakers will need to balance the desire to offset some of this year’s mid-year cuts with a projected $901 million budget gap in fiscal 2017.

“I know we will not take all of the rainy day fund in this fiscal year to have a cushion for us next year,” Sears said.