State Agencies Face 5% Across-the-Board Cut

By Ashli Sims, The News On 6 and Dave Jordan, NEWS 9

OKLAHOMA CITY -- State Treasurer Scott Meacham announced for state officials to order a five-percent across-the-board cut in budget allocations to all state agencies.

"As a result we will once again this month institute a 5% cut," said Oklahoma Treasurer Scott Meacham.

The recession had hurt budgets in most states, and Oklahoma is no exception. Late this afternoon, the state treasurer's office will inform all state agencies how much money they'll have to trim from their budgets. All state agencies are expecting cuts.

"We had hoped to see improvement in August revenue collections, but unfortunately, the totals were similar to those posted in July," said Gov. Brad Henry. "As a result, we will have to implement another five percent cut in the monthly allocation to state agencies."

Revenue collections for July are $335 million. Last year around this time, revenue was $451 million.

August numbers are in line with the shortfall the state had been seeing all year.

Some state agencies like the Office of Juvenile Affairs have already put contingency plans in place. It's hoping to reduce its budget through furloughs and buyouts. Last week, officials there said layoffs are an option, but that's a last resort.

"For the past several months, we have warned state agency directors to prepare for the possibility of continued reductions depending on monthly revenue performance," said Gov. Henry. "Still, we know these cuts will not be easy to implement, particularly after the budget reductions we authorized in the last legislative session."

The bigger question is whether the state will use federal stimulus money or tap into the rainy day fund. State Treasurer Scott Meacham said all options are on the table.

"Unless there's a dramatic turnaround in the next few months, which I really don't see coming, I think it is very likely that we will continue to see cuts to state agencies," said Oklahoma Treasurer Scott Meacham.

Obviously, the gloomy financial news has some area school districts scrambling to shuffle their finances.

Tulsa Public Schools already cut bus routes to trim millions from its budget.  Now, the district is facing another $500,000 cut.

There's no word on how they'll make up that money. 

Broken Arrow Public Schools is also expecting to cut $295,000.  But, they were anticipating a shortfall so the district should be able to absorb the cuts.

Still, it is tough for schools because they've already planned to spend the money that is now coming up short.

More on NewsOn6.com: Oklahoma's Tax Revenue Plunges as Recession Hits State

8/24/2009 Related story: State Revenue Shortfall Has Lawmakers Looking At Cuts

Statement by Gov. Brad Henry

"We had hoped to see improvement in August revenue collections, but unfortunately, the totals were similar to those posted in July.   As a result, we will have to implement another 5 percent cut in the monthly allocation to state agencies.  

"For the past several months, we have warned state agency directors to prepare for the possibility of continued reductions depending on monthly revenue performance.  Still, we know these cuts will not be easy to implement, particularly after the budget reductions we authorized in the last legislative session.

"We are continuing our discussions with legislative leaders and reviewing all options available to address the possibility of a protracted decline in future revenue collections.  Because those talks are ongoing and we are still digesting the latest revenue numbers, it would be premature to say what ultimate course of action we will choose."