Faced with falling revenues, Gov. Brad Henry and legislative leaders are considering holding a special legislative session to rebalance Oklahoma’s budget.
Treasurer Scott Meacham said the budget shortfall this fiscal year could surpass the $700 million shortfall of fiscal 2003 that ranked as the worst in state history.
In Oklahoma, a special session can be called by the governor or two-thirds of the Legislature. Lawmakers could cut state agencies’ funding and draw down the nearly $600 million in the rainy-day fund.
To use the fund, the state Board of Equalization would have to predict a budget shortfall for the entire fiscal year and declare a revenue failure. Under that scenario, lawmakers could tap up to three-eighths, or $233.7 million, of the fund, according to the Office of State Finance.
If Henry and two-thirds of the Legislature declare an emergency, they would be allowed to use a quarter, or $149 million, of the fund.
In the fiscal year ended June 30, the state suffered six straight months of falling revenues, with the trend continuing in July. Tax collections of nearly $337 million in July represented a drop of more than $120 million, or about 26%, from July 2008. The revenue also was more than $74 million, or 18%, below what officials expected.
The state cut spending across the board by 5% in August, following 7% cuts in July.
