DALLAS - Oklahoma officials hope to use federal stimulus funds to reduce by more than half an estimated shortfall of $900 million in the state's fiscal 2010 budget.
Treasurer Scott Meacham said most of the stimulus money the state would receive is dedicated to education, transportation projects, and other uses that will not reduce the projected shortfall. However, he said, as much as $500 million in budget stabilization funds from the state's allocation can be used to plug some of the holes in the budget for fiscal 2010, which begins July 1.
The state is to receive $2.6 billion over the next two years from the $787 billion stimulus package signed last week by President Obama.
"We'll be getting $578 million in budget stabilization funds, but $473 million of that can only go to make up shortfalls in public and higher education," Meacham said. "The stimulus bill was written with an eye to states with current budget problems, while ours is more in the coming fiscal years."
Meacham said the state is asking the U.S. Department of Education to clarify how the education stimulus dollars can be spent.
"The other $105 million is for public safety and other governmental uses. That is much more flexible," Meacham said.
The State Board of Equalization certified in early February a new revenue estimate that gives legislators $6.46 billion to appropriate in the next budget, which is $612.5 million or almost 9% less than the state's $7.1 billion budget for fiscal 2009.
Revenues from Oklahoma's severance taxes on oil and gas have plummeted along with energy prices in recent months. The revenue report for January shows a two-thirds drop in severance taxes, from $98.7 million in December to $35.2 million last month.
With the lower revenue, the budget shortfall for next fiscal year is more than $900 million due to a phased reduction in federal Medicare reimbursements and the use of carryover funds and one-time revenues in the current state budget.
An earlier estimate that revenues would be off $300 million was used by Gov. Brad Henry to develop the $7.09 billion executive budget presented to the Legislature when it convened in early February. The governor's budget proposal for 2010 was $100 million less than the final budget for fiscal 2009.
Henry's executive budget did not include cuts in education, transportation, public safety, or health care, which account for about 80% of the general fund budget. However, an additional $400 million or more in cuts must now be found, depending on the level of support in the federal stimulus package.
House Speaker Chris Benge, R-Tulsa, said he has directed the House Appropriations and Budget Committee to oversee state agency spending of federal stimulus dollars coming to Oklahoma.
