Another Budget Cut for State Agencies?

It looks like Oklahoma is headed for another tight budget year in FY 2017. Once again, lawmakers are saying that our state’s revenue is not keeping up with the cost of providing core services to Oklahoma’s citizens and business. This year’s shortfall was around $600 million and the state was required to use “one-time money” in addition to the cuts made by state agencies to balance the budget.  Most of the recent fiscal years have been “budget cut years”, so the declaration for agencies to prepare for another round of cuts comes as no surprise to the hard working men and women provide services.

When the legislative session begins in February, lawmakers will determine how much money to appropriate to state agencies for the 2017 fiscal year beginning July 1, 2016.
In a recent statement Gov. Fallin said, “I’m asking every agency to start planning for potential spending cuts and to develop a strategy that protects essential services” she said. “It’s important we get ahead of this issue as we enter a difficult budget year. Families and businesses tighten their belts during lean times; our state agencies can do the same”
Because state agencies have reduced or eliminated non-essential expenses during the last several rounds of budget cuts, there is not much more room to cut expenses without directly cutting or eliminating programs and services that our friends and neighbors access.

Her office talked about eliminating non-essential out of state travel and promotional items to market services agencies provide or cutting back on membership to professional organizations. Many agencies have already taken these steps during previous years’ budget cuts. The amount saved by further cutting these types of expenses will help some but will not come close to balancing next year’s budget.

Agencies must not balance their budget solely by reducing their staff. If they are forced to make cuts to balance their budget, reductions should be spread across their agency. That means they must reduce provider payments and cut, or eliminate private contracts in addition to any reductions in staff. Agencies must also protect the front line workers who are crucial to providing services. A reduction in the number of workers who work in our prisons, veterans’ centers, roads and highways would be detrimental to our state.  Having fewer workers to inspect restaurants, provide services to seniors or protect vulnerable children and adults would also have dire consequences.

If you take a hard look at state services, there really is not an area of state government that can absorb significant cuts without hurting the services they provide.
Also, if cuts are necessary common education and higher education should also share some of the burden. The responsibility to balance next year’s budget must not fall solely on the backs of state agencies, their staffs or the people they serve.

Oklahoma must also review the amount of money that is spent outside the legislative appropriation process. Millions of dollars are never made available to lawmakers appropriate to state agencies for their services

Part of this review would be looking at Oklahoma’s corporate tax incentives to determine if those credits are accomplishing their goals. Using tax incentives to attract business and industry can be a great economic tool for a state. However, Oklahoma does not review the credits that it gives to see if they are beneficial to our economy.  These credits have been discussed several times over the past few years, but little action has been taken. It is time to review those credits.

We don’t know how much the shortfall will be for next year but we can be certain it is going to be a significant blow to our state budget. Regardless of the amount, it must not be the sole responsibility of state employees to balance the budget. If cuts are made, those cuts must be absorbed by private service providers as well.

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