Last Thursday, Oklahoma Governor Brad Henry and legislative leaders announced the broad parameters of a $6.7 billion budget deal in a week that began with much uncertainty. As the governor and fellow Democrats hoped, the accord included notable “revenue enhancements.” Disappointing many Republicans, only $100 million will remain in the Constitutional Reserve (the Rainy Day Fund).
Treasurer Scott Meacham confirmed education was the last matter resolved: “It was about 9:30 p.m. Wednesday night (May 19). It took a lot of our time. After all, it is over half the budget when you consider Higher Ed, Common Ed and CareerTech.” Education spending cuts were held to low single digits, while smaller agencies absorb cumulative two-year cuts greater than 15%.
Complaints arose quickly from partisan flanks of the bipartisan team - House Speaker Chris Benge and Senate President Pro Tem Glenn Coffee for the Republicans and the governor for Democrats.Friday afternoon, House Minority Leader Danny Morgan of Prague told CapitolBeatOK his caucus would “on a case-by-case basis” support the emergency clauses needed to pass budgets. The emergency assures a law goes into effect after the chief executive’s signature. Otherwise, implementation is delayed 90 days.
By Friday night, things were jumbled. An insurance claims fee to provide $78 million of “enhancements” needed for the deal did pass the House 60-31, but enough members of both parties withheld support for the emergency (68 yes votes were needed) to create confusion and delay.
Another challenge came Friday morning. Speaker-designate Kris Steele of Shawnee, presiding during debate over S.J.R. 61, a bill designed to create an “in lieu of” levy to avoid massive tax hikes on business “intangibles,” ruled the matter germane. He was challenged by GOP Rep. Mike Reynolds of Oklahoma City. Most of those who stood to second Reynolds were Democrats. Debate and discussion took about two hours.
Despite jolts, the general appropriations bill cleared both chambers on Friday. Tax credit moratoria which had failed earlier also passed.
State Rep. Scott Inman of Oklahoma City, leader-designate for House Democrats, told CapitolBeatOK Friday afternoon: “We feel as if our efforts were important in holding budget cuts to a minimum.
“We believe the hospital provider fee and other revenue enhancements could have gone a long way to close more of that gap, but the Republicans were not willing to work with us on that.”
Sen. Charlie Laster, Minority leader, told reporters Thursday evening, “I have some disappointment, certainly, that a hospital provider fee is not part of the enhancements.” He added, “I have every reason to think that proposal will be back on the table next year.” Democrats strengthened Henry’s hand in late negotiations and in non-budgetary battles, including his vetoes.
Reynolds called the new budget for Fiscal Year 2011 “a disaster,” but House Speaker Benge evoked Will Rogers when he quipped, “I’ve never seen any budget that Rep. Reynolds liked.” Although Benge told fellow Republicans the budget included spending he still found objectionable, he defended the overall product: “We managed to get this done and leave some money in the reserve fund in a position to be deployed next year.”
President Pro Tem Coffee, an Oklahoma City Republican, characterized the budget as “a mixed bag. This place is built on compromise. I do have several concerns. This is built on federal dollars and a huge amount of [federal] stimulus money. I think it’s clear the federal government is broke and we in the states cannot continue to rely or count on that money.” He admitted disappointment in the Rainy Day Fund balance, observing, “There is a likely $800 million hole for next year.”
Treasurer Meacham, Gov. Henry’s closest budget adviser, said the Great Recession presented unprecedented challenges: “Never before has a governor and a Legislature faced a challenge like this.”
Asked if future budgets should consider sale of state assets. Meacham replied: “Governments have to be careful about the things they do in budget situations like this, decisions that could cost them dearly down the line. The related question is should you be looking at assets and potential one-time gains in resources? Of course you should, absolutely. Government should be looking at what it really needs, what should be retained and what could be converted into an asset.”
Participants in the process and analysts on the outside looking in began the final week of the 2010 session believing the Legislature and the governor will finish their work by 5 p.m. on Friday, May 28. Meacham told reporters in his budget briefing: “We’ll get out of here by next Friday.”
