State Should Allocate Surplus Funds To State Agencies Quickly

Oklahoma’s 2017 state fiscal year (SFY 17) begins July 1, 2016 and is also the date that state agencies must submit a budget to the Office of Management and Enterprise Services (OMES) detailing how they will spend its SFY 17 appropriation.

Due to a significant drop in revenue, most state agencies received fewer dollars than in SFY 16 despite an increased demand for state agency services. Currently, agency personnel are considering  what to cut to balance their 2017 budget, as required by the Oklahoma constitution.

However, state officials recently announced that Oklahoma has a SFY 2016 $100 million surplus due to agencies’ significant spending cuts after  the first of two 2016 announced revenue failures coupled with an  increase in March 2016 revenue. Unfortunately for those who depend on core state services, this led to Oklahoma’s state agencies reducing staff and services more than necessary to account for declining revenue.

If these surplus funds would have been accounted for prior to the second revenue failure announcement, the cuts state agencies were forced to make would not have been as deep.

Now, the surplus must be returned to the agencies as soon as possible to help prevent further unnecessary, harmful program and staff cuts. The longer it takes the more likely state agencies will have to make more unnecessary cuts. Even though the surplus would be split between state agencies,  those funds may help prevent additional agency reductions. State agency officials working to prepare their SFY2017 budget should be able to factor in their share of the $100 million. They need those funds ASAP.

The budget outlook for 2018 is concerning as demand for services remains high. The need for behavioral health services from the Department of Mental Health and Substance Abuse is great. Department of Corrections’ facilities are overcrowded and understaffed and the DHS offices remain full of Oklahomans seeking safety net services. Revenue  from the current sources is not keeping up with demand for services. During the session, OPEA called for steps to significantly increase revenue to prevent cuts to core services.

Also, Oklahoma should implement independent checks and balances to the state’s revenue failure determination process to lessen the occurrence of another shortfall miscalculation. The announcement of the surplus raises more questions about the process Oklahoma uses to determine how much revenue it has and how that revenue is distributed. Maybe it is time for changes in Oklahoma’s budget process that would allow for input from more lawmakers, agency heads and stakeholders earlier in the legislative session.  A little transparency into the process wouldn’t hurt either.

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