By Constitution Staff

Gov. Mary Fallin announced on September 1that she had decided not to call a special legislative session. Fallin had previously floated the idea to reallocate $140.8 million in funds that were held back from agency budgets, with most of the money going to increase teacher salaries. But, House Speaker Jeff Hickman and Senate President Pro Tem Brian Bingman said there was not support for the special session and that both legislators and their constituents believed the money should be returned to agencies.

The funds were cut from agencies during last fiscal year’s revenue failure. In order to maintain the state’s constitutional balanced budget requirement, state law requires across-the-board reductions to most agency appropriations when revenue collections are projected to fall more than five percent below the estimate for the remainder of a fiscal year. The state fiscal year begins on July 1 and ends on June 30. Amid slumping oil prices and corresponding state revenue declines, applicable Fiscal Year 2016 agency allocations were cut across the board by 7 percent, or $382 million, via reductions in January and March.

The money being returned became available with the final reconciliation of the state Fiscal Year 2016 which ended June 30. The reconciliation confirmed that the actual midyear reduction amount only needed to be 4.4 percent rather than 7 percent. In addition to the $140.8 million in general revenue going to 62 agencies, another $11.4 million in other revenues will go to the Oklahoma Department of Transportation. So, the state is actually returning a total of $152.1 million to agency budgets.

“This action closes out the 2016 fiscal year and gives agencies available funds to help with budget challenges,” said Gov. Mary Fallin. “Although I preferred that legislators would have returned in special session to send more of this money to agencies with the most pressing needs, such as the education, public safety, health, mental health and corrections departments, I’m glad this will provide some relief. Those agencies are among the ones receiving the largest share of this money to either restore services or stave off additional cuts.”

Agencies can use the funds for the same purpose for which the Legislature appropriated the funds in the 2015 legislative session. If an agency wants to use the funds for another purpose, it must follow budget revision procedures outlined in statute.

“The return of these funds, while still a net cut, is a rare positive in the historically challenging budget cycle the state is enduring. Agencies are getting about $2.60 back for every $7 that was cut midyear, so the net result is still a cut, but a smaller cut than initially received,” said Office of Management and Enterprise Services (OMES) Director Preston Doerflinger. “Opting for a deeper cut was the right call because it allowed funds to be returned instead of cutting funds again and again, which would have happened if the cut was not deep enough. Revenue failures are unpleasant no matter how you slice it, but if there is any silver lining to be found, this is it.”

The four agencies receiving the largest distributions are the state Department of Education, $40.2 million; Oklahoma Health Care Authority, $23.5 million; Higher Education, $20.7 million; and Oklahoma Department of Human Services, $16.1 million.