Budget Agreement Thursday

State leaders have reached agreement on accessing Oklahoma’s Constitutional Reserve, better known as the Rainy Day Fund, CapitolBeatOK has learned.

Wednesday night, legislative sources who responded on condition of anonymity and who declined to provide exact details of the accord said an agreement would be unveiled Thursday at the state Capitol.  Some sources had anticipated agreement would be announced Wednesday morning, but a clash over at least one spending issue resulted in fresh negotiations Wednesday afternoon.

Governor Brad Henry, President Pro Tem Glenn Coffee and House Speaker Chris Benge have consented to a Thursday announcement, sources said.  The rainy day gap among the three has been as high as $257 million (between Henry and Benge)  — but each of the three has consistently said accord was likely.

The leaders agreed on broad issues several weeks ago, including promises to provide supplemental appropriations for common education, higher education, Corrections and health care.

However, they remained far apart late last week on how much of the Rainy Day Fund to use to close the state’s budget gap for Fiscal Year 2010 and for FY 2011. The leaders have also disagreed, respectfully, on total spending issues for this year, and on other issues. However, each of them said repeatedly this week that negotiations could bear fruit within days.

As a result of the Board of Equalization meeting on Tuesday, the government estimates a nearly $670 million shortfall remains for FY 2010, even after allocation cuts averaging 7.5% for most agencies this year. However, the gap for FY 2011 was estimated at about $1.2 billion after the meeting.

The latest data are actually a modest improvement on the estimates established in December. For FY 2010, rising oil and natural gas prices and resulting boosts in tax collections have added about $60 million to the state’s revenue available for expenditure. The latest analysis from the Tax Commission for FY 2011, as detailed for reporters on Monday and summarized for the Board of Equalization on Tuesday, projects about $120 million more in tax revenue than estimated in December.