Revenue failure deepens; more cuts needed

Saturday, February 16th 2002, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ State revenue problems deepened Friday, with the Office of State Finance reporting that state agencies face average budget cuts of 4.5 percent over the next four months.

That's more than double the 2.1 percent in cuts that had been called for in December to bring agency allocations in line with revenue collections.

New estimates also show that the Legislature will have $350.3 million less to spend on government services next year. That's up $88 million over December.

Sen. Cal Hobson, D-Lexington, Senate appropriations vice chairman, said the latest figures show the national recession, ``while slow to get here, has arrived with a vengeance.''

``We will do our best to close the gap on these deficits and not give up on our desire to first shield education and secondly the health care delivery system,'' he said.

If education and health care is protected for reductions, Hobson said, it will mean other agencies will face ``seriously deep cuts.''

Falling natural gas prices have been blamed for most of the state's budget problems earlier, but the latest reports showed lowered estimates on sales and personal income tax collections next year.

For instance, the Tax Commission is now predicting that income taxes will be $70 million less next year than had earlier been projected. Sales taxes are now pegged to be $9 million lower than the December estimate.

Senate President Pro Tem Stratton Taylor said he would be discussing budget priorities in the coming days with Gov. Frank Keating and other legislative leaders.

``Hopefully, this will be the last bit of bad budget news we receive this year, but it is certainly possible that things could get worse in the months to come,'' Taylor, D-Claremore, said.

The Board of Equalization meets Tuesday to make its final certification of next year's budget.

The latest figures show $5.27 billion will be available for appropriation, a decrease of $88 million from the estimate approved in December.

The Tax Commission now projects that tax receipts for the current year will decline an additional $21.4 million, meaning total collections will finish $311.4 million, or 6.4 percent, below the estimate.

Budget writers planned to make up part of the shortfall by tapping the constitutional Rainy Day Fund for at least $170 million.

Keating saw a benefit from the decline in revenue.

``I think Oklahoma can come out of this with a leaner more streamlined and efficient government,'' Keating said.

He said he would work with the Legislature to eliminate government waste, while protecting vital services.

Hobson said appropriation subcommittee chairmen had been warned that revenue estimates might be lowered.

``It's bad news, but it shouldn't be shocking news,'' he said.