You Thought Last Year Was Bad

Capitol Considerations

A Weekly Column by Senator Micheal Bergstrom

You Thought Last Year Was Bad

Hold on to your hats. This is going to be a bumpy ride.

The State’s budget problems are even worse than you thought.

Let’s start with the projected budget shortfall that’s somewhere in the $880 million range. (That doesn’t include the recent revenue failures.)  Now, let’s add to that the more than $100 million that we’re trying to come up with right now because some of the state’s agencies were only given funding in the current budget for 10 months.

You heard that right. Last year, the legislature solved part of the budget crisis by only budgeting funds for 10 months instead of 12. That is called ‘kicking the budget crisis can’ down the road. That can is now full of worms and needing to be dealt with.

So, here we are with a billion dollar budget shortfall.

Don’t worry. It gets worse.

It turns out last year the legislature decided to empty out the state’s ‘Special Cash Fund,’ which is sort of like a bank account a business might keep working capital in. The problem is, constitutionally, the State of Oklahoma has to pay its bills. That takes money. You know, cash.

So, to do that, the folks who pay the bills, also known as the Oklahoma Office of Management and Enterprises Services (OMES), had to borrow a little from the Rainy Day Fund, in the amount of $380 million.

Oh, and that has to be paid back to the Rainy Day Fund by June 30.

That means that our budget shortfall is actually just under $1.4 billion.

Last year it was $1.3 billion. So this year is even worse. If your head is starting to hurt thinking about that, just imagine how I feel.

The question is how do we fix this? Well, we need to start by putting everything on the table. Here are some examples.

One - We need to scrap the next income tax cut. The Senate has. Now it’s up to the House.

Two - Find every efficiency we can, though I doubt we are going to find a billion dollars that way.

Three - Get rid of some tax incentives and credits, and not just wind production credits.

Four -  Pass a production tax on electricity generated by wind.

            Five - Consider an increase of taxes on diesel and gas. They have not been increased in three decades.

Six -  Consider increasing the cigarette tax.

We will need to find a balance of where we can cut, like tax credits and line items in agencies, and where we can bring in more revenue if we are going to balance this budget and not just kick this can down the road again.

I am interested in feedback from my constituents, so if you have any questions or comments, please email me at bergstrom@oksenate.gov.  My office can also be reached by phone at 405-521-5561.