OKLAHOMA CITY - Good news and bad news out of the state Capitol. The good news is revenues are higher than expected. The bad news; the state is still operating deep in the red. 

The Board of Equalization, which monitors the state’s tax revenues, reported that the state is $167.8 million in the hole going into fiscal year 2019.

“But the good news is two years ago it was $1.2 billion. Last year, it was $800 million. So now, we’ve closed that gap with new revenue,” Governor Mary Fallin said.

But that still means if the legislature doesn’t come up with some cash, state agencies face even more cuts.

“If we don’t have any new revenue that comes up on the table, we still could have approximately a 2.5 percent cut,” said Gov. Fallin.

Gov. Fallin also says that’s just to balance the budget. It doesn’t even touch the $800 million needed for two new prisons or increases in services for those with mental health and substance abuse issues.

“It’s not giving any agencies such as corrections, Department of Human Services, mental health, it’s not restoring any of their cuts. They’ll still keep the cuts they have and probably have cuts next year. It’s certainly not paying for any teacher pay raises,” Gov. Fallin said.

State Superintendent of Public Instruction Joy Hofmeister said school leaders will keep lobbying lawmakers.

“We are certainly not willing to just say oh well and shrug our shoulders and go home,” said Hofmeister.

The House of Representatives has already closed the books on fiscal year 2018, cutting agencies by almost two-percent. The Senate is expected to do the same. When that happens, Gov. Fallin says she’ll sign off on the 2018 budget and focus on 2019.