FOR IMMEDIATE RELEASE May 24, 2016
2017 Fiscal Year Budget Agreement Reached
FY 2017 budget
agreement spreadsheet: https://www.ok.gov/OSF/documents/FY17GABillSummary.xlsx
FY 2017 budget agreement summary: https://www.ok.gov/OSF/documents/FY17BudgetAgreementSummary.pdf
OKLAHOMA CITY - Governor Mary Fallin, Senate President Pro
Tempore Brian Bingman and House Speaker Jeffrey W. Hickman today reached a 2017 fiscal
year budget agreement that maintains common education funding at current
levels, averts closures of hospitals and nursing homes and closes $969.3
million of the $1.3 billion budget gap policymakers faced this legislative
session.
If passed by the Legislature, the agreement would set FY
2017 appropriation levels at $6.78 billion, which is $360.7 million, or 5
percent, less than FY 2016 appropriations prior to the midyear revenue failure and
$67.8 million, or 1 percent, less than FY 2016 appropriations as adjusted by
the midyear revenue failure.
The $1.3 billion budget hole was the largest in state
history. Facing that gap, public schools braced for state aid reductions of up
to 20 percent and the Oklahoma Health Care Authority had prepared to initiate
provider rate cuts of up to 25 percent, which would have caused some hospitals
and nursing homes statewide to close or dramatically reduce services.
“Thankfully, those worst-case scenarios can be averted by
passing this budget,” said Governor Mary Fallin. “This agreement closes a
sizeable portion of a monumental budget hole and prevents the dire,
unacceptable outcomes so many Oklahomans have feared may happen this session.
There are still reductions in this budget, and it requires more hard votes to
pass, but it is certainly a workable budget even amid a major energy sector
downturn that is creating difficulties all across Oklahoma. We
worked hard to protect key core services - common education, health and human
services, corrections, mental health services and the Oklahoma Health Care
Authority – while keeping our eight-year transportation infrastructure plan
intact.”
By freeing up revenues through tax reform, structural budget
changes and cuts elsewhere in government, current funding levels for the State
Department of Education are maintained and an additional $83.8 million is
appropriated to the Oklahoma Health Care Authority, which will result in
negligible provider rate reductions of 3 percent or less that should not cause
closures of facilities or reductions of services.
Most agency appropriation reductions from FY 2016 as
adjusted by the midyear revenue failure to FY 2017 range from less than 1 percent
to 10 percent, with many agencies receiving an approximately 5 percent
appropriation reduction for FY 2017.
The agreement maintains existing funding at the Department
of Corrections by annualizing the department’s FY 2016 supplemental appropriation
of $27.6 million and making no further changes. It also protects critical
safety net programs by providing a $16.3 million, or 2.6 percent, appropriation
increase to the Department of Human Services that fully funds the Pinnacle Plan
and helps maintain other important services.
The Department of Mental Health and Substance Abuse Services
receives a $6.9 million, or 2.2 percent, appropriation increase to offset some reductions caused by the midyear FY 2016 revenue failure.
Budget negotiators said more than $2 billion in revenue
ideas were considered this session. Some are contained in the agreement, and
some were not for a variety of reasons.
“The absence of various revenue measures required deeper
reductions to higher education and transportation in order to avoid truly
unacceptable funding levels for K-12 schools and hospitals,” said Secretary of
Finance, Administration and Information Technology Preston L. Doerflinger. “Transportation
and higher education have superior financial positions compared to the rest of
government and can absorb reductions far better than common education and
health care could. In fact, transportation has said no projects will be significantly
altered under this plan, and higher education has already implemented several
cost-cutting measures in anticipation of reduced funding. These were difficult
decisions, but they had to be made when faced with a challenge of this
magnitude.”
Legislative leaders said the agreement can be passed through
the Legislature by Friday’s 5 p.m. constitutional deadline to adjourn Sine Die.
Senate President Pro Tempore Brian Bingman, R-Sapulpa, said:
“For months, the public has been concerned about the possibility of four-day
school weeks and mass closings at rural hospitals and nursing homes because of
drastic budget cuts. The budget agreement is a practical solution that closes
the shortfall while avoiding extreme cuts and worst-case
scenarios in our schools, our hospitals and nursing homes.”
House Speaker Jeffrey W. Hickman, R-Fairview, said: “This
agreement fully reflects the House Republican priority to see that schools are
protected, hospitals stay open and road projects stay on track. It is a
balanced approach that reins in tax breaks, responsibly bonds long-term
infrastructure and causes agencies to make the difficult spending reductions
necessary in a historic oil bust. House members worked harder than ever this
session to find conservative solutions to the greatest budget challenge of our
generation and we have those solutions in this agreement. We committed months ago to leading our state out of this
hole and now we must be committed to seeing this budget through to the finish
line.”
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