State Budget Decisions Again Could Happen in Session’s Final Days

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With more than half of this year’s legislative session in the rearview mirror, Oklahoma’s budget remains a mystery.

Republican leaders said this week that all options are on the table to close the state’s $878 million budget hole and find at least $53 million to fund the first year of a teacher-pay package.

But lawmakers haven’t disclosed what specific revenue-raising proposals will be voted on or how much, if at all, state agencies and education will be cut.

Final Budget in Final Weeks

One thing is clear: Similar to past years, lawmakers will likely finalize the budget during the final weeks, if not days, of the session. Legislative leaders said Thursday that although budget talks have been ongoing for months, they don’t expect to announce a plan until at least the middle of May.

“We hear comments every year that, ‘Oh my gosh, it’s April and we haven’t seen the budget yet,’” said Senate Pro Tempore Mike Shulz, R-Altus. “But I think we are right on time and where we need to be to get a product by the end of May and to get a balanced budget passed.”

The Senate leader’s comments came a week after Gov. Mary Fallin called on lawmakers to identify ways to find new revenue and avoid drastic budget cuts.

“We got to get going,” Fallin said. “Unless we put some ideas on the table and act upon it, we are going to have a really tough year.”

Fallin’s budget proposal, which included raising the fuel tax and expanding the sales tax to include services like haircuts and utility bills, has failed to gain any traction among her fellow Republicans. And while Democrats have come out with their own proposal, Republican leaders haven’t said what specific revenue-raising proposals, outside of increasing the cigarette tax, they plan to seek.

House Speaker Charles McCall, R-Atoka, said Republicans are discussing many ideas, including eliminating or capping various tax credits.

“There are a lot of options out there,” he said. “More options than what the budget hole represents, and all of those are being considered and discussed.”

Education Funding Also Unresolved

For the 13th straight year, lawmakers didn’t meet a self-imposed law that requires the Legislature to send the governor a bill funding common education by April 1. Violating the rule, however, carries no penalty, and Schulz said meeting the deadline would be “premature” without knowing what revenue-raising bills will pass.

Unlike last year, when the Legislature was able to hold K-12 funding flat, Schulz said he can’t promise that will happen again.

“I think everyone should prepare for cuts,” he said. “When you are talking about the kind of shortfalls we are talking about, it’s impossible to hold the largest single appropriation completely harmless and not do away with the rest of government.”

Whether lawmakers will be able to pay for a proposed teacher-pay package is also up in the air. In addition to closing the budget hole, lawmakers will need to find $53 million to pay for just a $1,000 raise.

That’s the amount proposed for the first year of raises in the House’s three-year plan, which would ultimately raise salaries by $6,000. That proposal has passed the House and a Senate budget subcommittee.

McCall said there are ongoing talks with Senate leadership on a proposal to fund the plan. But he won’t say what that is until there is an indication that the Senate is on board with it.

“At the end of the day, the only way we are going to get that pay raise done is if I have Senate support for it,” he said. “But I think we’ll have that identified very soon.”

Dim Hopes for Medicaid Expansion

House Democrats announced Thursday they are again calling for the Legislature to reconsider a Medicaid expansion plan that was backed by Fallin last year.

Minority Leader Scott Inman, D-Del City, said Democrats held off on suggesting the proposal as Congress debated a bill that would repeal and replace the Affordable Care Act. But with efforts to overhaul the health-care bill stalled, at least temporarily, he said Oklahoma should join states that have accepted the expansion.

The “rebalancing plan” would shift about 175,000 Medicaid recipients to the federal health care exchange, where they would buy insurance with tax credits. It would then add about 175,000 currently uninsured residents to a new Insure Oklahoma plan.

Inman said this would bring in $990 million in federal funds. And in exchange for Republicans supporting it, he said Democrats would deliver the needed votes to pass the Republican-supported cigarette-tax increase to pay for the state’s share of the expansion.

But minutes after Inman made the announcement, Schulz said expanding Medicaid is likely a non-starter while Congress continues to look at plans to overhaul the federal law.

“There are so much unknown and uncertainty about what is happening in Washington, D.C., that we really don’t know what we need to do as state until we know what the federal government is going to do,” he said.

Veto Still on the Table

It’s possible that the Legislature could work beyond its expected May 25 adjournment date.

Last week, Fallin repeated her threat that she could veto the budget bill if she feels the Legislature didn’t do enough to spare agencies and education from cuts.

“I told (lawmakers) I’m more than happy to cancel any summer plans I have,” she said. “And I would suggest if we don’t get our budget done pretty soon, we might have to look at a special or concurrent session.”

Reach reporter Trevor Brown at tbrown@oklahomawatch.org.