Largest state budget falls short of restoring years of cuts
Oklahoma Watch is a nonprofit corporation whose mission is to produce in-depth and investigative journalism on public-policy and quality-of-life issues facing the state. COURTESY
OKLAHOMA CITY – Lawmakers have passed the largest state budget in Oklahoma history. But that doesn’t mean state agencies have recovered from years of cost-cutting.
The House of Representatives voted 63-31 April 27 to approve the $7.5 billion appropriations bill that will be $724 million – or 10.9 percent – more than the state’s current fiscal year budget.
The bulk of the new funds will be used to boost salaries for teachers, school support staff and state employees. And millions of additional dollars will go into the school funding formula and targeted initiatives for criminal justice, social services and other programs.
GOP legislative leaders celebrated the passage of the measure that now will go to Gov. Mary Fallin for her consideration. They acknowledged it wasn’t perfect but hailed it as an achievement – the first time in years that the state budget wasn’t cut.
But an Oklahoma Watch analysis shows the budget will ultimately do little to reverse years of reductions to education, health care, public safety and other state agencies.
About two-thirds of the 63 agencies getting a funding boost this year are receiving extra money strictly to fund employee pay raises as a result of legislation that passed this year.
More than half of the state’s larger departments will still receive less this year than they did in 2009 – the last year before revenues began to drop as a result of a nationwide recession followed by a downturn in the oil industry. Lawmakers largely responded by cutting budget and using one-time savings.
The difference between the state agencies’ 2009 and 2019 budgets is even more striking when the numbers are adjusted for inflation.
Just to keep up with the inflation rate, the Legislature would have needed to pass an $8.1 billion budget – nearly half a billion dollars more than what was approved for the 2019 budget.
Senate Appropriations Committee Chairwoman Kim David, R-Wagoner, called the 2019 budget a “fantastic beginning” that is “just the first step” toward pouring more money into education, health and other key services.
Others cautioned against applauding the 2019 budget, saying the proposal falls far short of undoing the damage from years of reduced or stagnant budgets.
“After a decade of failed tax cuts led to multiple revenue failures and devastating budget cuts, there is still much work to be done to repair the damage,” said Minority Leader Sen. John Sparks, D-Norman. “Instead of celebrating that the proposed budget avoids agency cuts, we should take the time to negotiate revenue measures that will allow us to really invest in education, health care, core services and infrastructure.”Who’s Getting What
Public schools are among the biggest winners in this year’s budget, with the Department of Education receiving an increase of $480 million, or nearly 20 percent, over the current $2.4 billion budget, which was cut halfway through the fiscal year.
Common-education increases include $365 million for the teacher raise package, $52 million for support staff raises, $33 million for textbooks and $17 million to be added to the funding formula.
Budget increases for other state agencies include:
• $24.6 million for the Department of Human Services for foster care, elder care and developmental disability services, including beginning to address the years-long waiting list for such services.
• $11 million for criminal justice reforms.
• $2 million to the Legislative Service Bureau for agency performance audits.
• $4.8 million for the Department of Corrections to implement an electronic offender-management system.
• $4 million to the Office of Emergency Management for disaster relief.
• $400,000 to the Department of Agriculture for rural firefighters.
Much of the rest of the new money goes toward state employee pay raises totaling $54 million that the Legislature approved. That money, spread out among agencies’ budgets, accounts for all or most of the funding increases most agencies will see.
That leaves little or no money to restore the years of budget cuts lawmakers have approved due to the numerous budget shortfalls or mid-year revenue failures seen over the past decade.
The State Regents for Higher Education, for example, received a $7.8 million increase compared to their current funding. This represents only a 1 percent increase over the past year and barely makes a dent in more than quarter-billion dollars cut over the decade.
Chancellor Glen D. Johnson said the regents are thankful to Fallin and the Legislature for the increase, as well as an extra $7.5 million that will go toward concurrent enrollment. But he said in a statement Thursday that he will continue to stress the importance of higher education funding.
“Data clearly show that states with a high percentage of college degree holders have higher per capita incomes and stronger economies,” he said. “We will continue to make the case that there is no better investment to ensure a brighter future for Oklahoma than the investment our policy leaders can make in higher education.”
Other agencies that have seen a drop in state funding since 2009 include:
• Department of Transportation (decrease of $41.8 million, or 20.1 percent).
• Office of Juvenile Affairs (decrease of $19.5 million, or 17.3 percent)
• Department of Health (decrease of $20 million, or 26.9 percent)
• Department of Veterans Affairs (decrease of $7.9 million, or 19.7 percent)
• Department of Environmental Quality (decrease of $3.2 million, or 33.2 percent)
• District Attorneys Council (decrease of $6.7 million, or 15.8 percent)
Joe Dorman, a former Democratic state lawmaker, 2014 gubernatorial candidate and current head of the nonprofit Oklahoma Institute for Child Advocacy, said it is a relief that many of the agencies his group works with won’t be cut again. But in light of the decades of budget cuts, this budget shouldn’t be celebrated, he said.
“I’m happy we’re seeing a little boost, but we can’t rest on our laurels,” he said. “After seeing multiple years of financial crises, it is going to be some time before we get a lot of these agencies to be fully funded so they can perform their mission.”
Oklahoma’s growing population is also putting pressure on state coffers.
Census Bureau estimates show Oklahoma has gained about 213,000 people over the past decade. This often translates into more duties for many of the state’s safety-net programs.
“Child welfare services is a perfect example,” Dorman said. “It’s great that our state employees are getting a boost in their salary, but we also need money to hire more employees as their caseloads go up.”Money Only Goes So Far
When adjusted for inflation, only four of the state’s larger agencies will be getting a higher appropriation than they did in 2009.
Funding needs persist even for these departments.
The Education Department’s proposed budget of $2.9 billion is $40 million over 2009’s inflation-adjusted amount.
But as the two-week teacher walkout showed, many educators don’t think that is enough. This is partly because since 2009, student enrollment statewide has increased by about 40,000.
Meanwhile, the Department of Human Services, Oklahoma Health Care Authority and the Department of Mental Health and Substance Abuse Services have also seen their budgets increase during this period even when adjusted for inflation.
But these three agencies have been hit with a mixture of increased demand, federal funding constraints and mandated costs, such as the Health Care Authority’s having to assume a greater portion of the cost to train doctors.
The agencies also have experienced cuts in recent years.
The new budget for the mental health department still remains below its peak funding level despite getting a nearly $12 million funding bump this year.
“This doesn’t even get us back to your 2016 funding levels,” said Wendi Fralick, chief administrative officer with the Mental Health Association Oklahoma. “And this is not enough because we weren’t even meeting our needs with that funding.”
Fralick acknowledged that avoiding another round of budget cuts was good news because she doesn’t think the system could “manage” with fewer funds. But, she said, she hopes lawmakers won’t be content to simply avoid additional cuts in future budgets.
“I don’t want this to be just seen as a Band-Aid to keep advocates pacified,” she said. “We want them to come back with more funding.”