Oklahoma legislative leaders agree on $5 billion budget

Wednesday, April 9th 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Calling it the ``best of a difficult situation,'' Gov. Brad Henry and legislative leaders have agreed on a $5 billion budget proposal.

The bipartisan plan, reached Tuesday, restricts future Rainy Day Fund spending and requires early action on education bills. Leaders agreed to act next week on a previously agreed-upon $1.95 billion appropriations for public schools.

``This budget isn't free of pain or sacrifice, but it is the best possible plan that could be drafted with the resources at hand,'' Henry said. ``It prioritizes public education and funds it early in the process, in addition to protecting health care programs and other priority areas.

``This bipartisan agreement makes the best of a difficult situation and shows that we can address major challenges if we put aside our differences and work together.''

Senate President Pro Tem Cal Hobson, D-Lexington, said the agreement doesn't mean all is well in state financing.

``Within the framework of this budget compromise, there will be cuts in state services that will be felt by every family in Oklahoma,'' Hobson said.

To partially offset a budget shortfall of almost $700 million, Democratic and Republican leaders agreed on proposals to raise $227 million.

Of that figure, $92.6 million would come from refinancing 1992 general obligation bonds and $82.2 million would come from the relocation of premium taxes from the police, firefighters and law enforcement pension funds.

The plan proposes to pick up $11.6 million by increasing from $10 to $20 the cost insurance companies pay for copies of drivers' license records, $5.9 million by changing how cigarettes are taxed and $1 million by increasing the fee retail merchants pay for a sales tax permit.

The cigarette tax plan and other key proposals to raise revenue found their root in the budget Henry, a first-term Democratic governor, presented to the Legislature in February.

Sen. Mike Morgan, D-Stillwater, said the agreement does not preclude action on other fee increase proposals floating through the Legislature.

House Speaker Larry Adair, D-Stilwell, joined Hobson in saying there is a need for additional revenue.

``The House of Representatives is committed to a thorough review of the needs of education as well as those of all of state government through our committee process,'' Adair said. ``I plan on each member's expertise and ability to successfully address this challenging budget year.''

Under the plan, leaders agreed to set an early deadline for approving education funding each legislative session.

``This budget also includes agreements on a zero-based budgeting statute, new spending limits on the Rainy Day Fund and other reforms that will prevent future financial crises,'' said Rep. Todd Hiett, R-Kellyville, House GOP leader.

Under the plan, only one-fourth of the money in the Rainy Day account could be used for emergencies from year to year, unless there was a revenue shortfall. Lawmakers can now tap one-half of the money in the fund.

The plan gives lawmakers more flexibility in the use of funds to shore up state budgets when a revenue failure occurs.

Under next year's spending plan, natural resources and regulatory services spending took a 19.9 percent reduction, and general government and transportation was cut 14.3 percent.

The REAP program, which funds rural projects, was cut almost 66 percent to $6 million.

The education subcommittee will get $2.87 billion, of which $1.95 billion has been committed to schools. Health and social services gets $701 million, public safety $566 million, human services $503 million and natural resources $110.4 million.