State officials have ordered a five-percent across-the-board cut in budget allocations to all state agencies due to continued declining revenue.
It is the second consecutive month officials have taken such a measure, as state revenue collections fell due to lower energy prices and a nationwide recession, according to State Treasurer Scott Meacham.
For the month of August, the general revenue fund collections totaled $335.2 million. That’s $154.9 million or 31.6 percent, below last year and $131.3 million, or 28.2 percent, below the state’s estimate.
The five-percent allocation cutback was first instituted in August. For September, that reduction represents a total cut of about $21 million.
“September allocations are being reduced by five percent today due to the less than anticipated collections for the month of August,” state Finance Director Michael Clingman said. “As we did last month, we were able to minimize the impact of the collections shortfall this month by transferring cash reserves.”
State officials are continuing to meet with legislative leaders to discuss how to manage the shortfall in the coming months.
“We are still closely watching monthly collections,” Meacham said. “Until state revenues begin to rebound, we are making plans to ensure government services are not adversely impacted.”
The Rainy Day Fund currently contains $596.6 million. The state constitution allows up to three-eighths of the fund, or $223.7 million, to be used for budget stabilization for the current fiscal year. A like amount can also be used for a reduction in certification from one year to the next. An additional 25 percent, or $149.15 million, could also be accessed through emergency declaration.
Oklahomans for Responsible Government said the budget cuts were a good start, but more is needed.
“I’m pleased to see that State Treasurer Scott Meacham is once again using budget cuts as the solution to a monthly shortfall in revenue, but it’s clear that the 5% cut, even if it’s extended through the entire year, will probably not be enough,” said the group’s executive director, Brian Downs.
“OFRG continues its call for budget cuts, not the Rainy Day Fund, as the solution to Oklahoma’s budget problem. Using $225-million in Rainy Day Funds now will result in a $1-billion shortfall in 2012 because there will be $225-million in extra spending that should have been cut, $225-million less in the Rainy Day Fund and $600-million in federal stimulus funds that will no longer be available,” Downs added.
Data released by state officials showed revenues declined everywhere. Net income taxes were down nearly 23 percent from last year and 23.5 percent from estimates; state sales taxes were 16.6 percent below last year and almost 22 percent below the estimate.