State funding cutbacks cause severe shortfalls
As legislators continue working to close the state’s $1.3 billion budget gap, Gov. Mary Fallin has introduced a budget proposal that includes tax reforms and utilizing more than $500 million in bonds.
While preventing further cuts to education, healthcare and human services, the proposal calls for the elimination of sales tax exemp- tions that include NBA tickets, horse sales and sales to commercial airlines and railroads.
“We have to be careful that we don’t cut so far to the bone that we’re not effective in de- livering state services,” Fallin said in a press conference April 13.
If passed, officials said the measures would leave the state with $7 billion for the 2017 fiscal year, slightly less than what the state started with at the beginning of the 2016 fis- cal year.
The state’s first economic disaster since the 2008 recession, the 2016 shortfall came after a staggering 70 percent drop in crude oil pric- es that brought the the price per barrel of oil to the lowest it has been since 2003.
In a state where almost every tax source and 25 percent of jobs are tied to the energy sector, the Oklahoma economy is particularly vulnerable to fluctuations in oil price, accord- ing to Professor of Economics Craig Dawkins.
“The problem in being tied so closely to a commodity is the volatility of pricing and em- ployment for people in that industry,” Daw- kins said.
RSC is one of many educational institutes that have felt the impact of the shortfall, which resulted in a 11 percent reduction in funding to higher education.
In response, RSC began enacting measures to reduce expenditures, and the administra- tion recently announced plans for a four-day work week over the summer semester.
“We are in this together, and we will weath- er the storm as long as we keep positive and focused on the task at hand: to serve our students to the best of our ability,” said RSC President Jeanie Webb in an email addressed to faculty and staff.
Already, colleges across the state have enacted significant budget reductions and school districts were forced to consider four- day school weeks and job cuts that would af- fect more than 1,000 teachers and adminis- trators.
In April, Oklahoma City Public Schools dist rict announced plans for an 18 percent staff reduction that would see schools lose both administrative and teaching staff, while in- creasing classroom sizes as a result of a $30 million shortfall.
“We are forced to make these difficult deci- sions as a result of the statewide $1.3 billion revenue failure,” said OKCPS Superintendent *Robert Neu.
While legislators on both sides of the aisle expressed concerns over the reforms included in the governor’s budget proposal, lawmakers have only five weeks to develop an alternative before the end of the 2016 legislative session.
“I challenge the legislature and ask them to work with me to roll up their sleeves, do the hard work, get into the details of the state budget, the needs of state agencies,” Fallin said in a press conference.
*Quote from Robert Neu was obtained before his official separation from OKCPS.