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OKLAHOMA CITY (AP) — Gov. Mary Fallin and Republican legislative leaders announced a nearly $6.8 billion budget agreement Tuesday that would include no further funding cuts for public K-12 schools and prevent deep cuts to Medicaid provider rates but impose deep funding cuts on public colleges and universities.
The budget deal , which still must be approved by the House and Senate before they adjourn on Friday, would cover about $969.3 million of a $1.3 billion projected budget shortfall for the next fiscal year, which begins July 1.
As a result, state agencies would be forced to absorb about $360 million in cuts from last year's appropriation. The rest of the deficit was covered through a variety of revenue options, including a $200 million transportation bond issue and tapping a road and bridge fund for another $103 million, both of which still must be approved by rank-and-file members.
The agreement also taps about $144 million from the state's Rainy Day Fund, leaving the state's emergency fund with a balance of about $241 million.
"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," Fallin said in a statement. "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."
Oklahoma's colleges and universities will receive about $150 million less than last year's appropriation, a cut of nearly 16 percent. University of Oklahoma President David Boren called it "deeply disappointing."
"If passed as it is, it will further erode Oklahoma's future and opportunity for economic growth and jobs for our people," Boren said in a statement. "I hope that the budget will be reconsidered and improved."
Boren is spearheading a proposed 1 percent increase in the state sales tax that, if approved by voters in November, would generate an additional $615 million annually for education, including about $120 million for colleges and universities.
Democrats, who are outnumbered in both chambers, are upset that lawmakers didn't consider rolling back a .25 percent cut in the state's individual income tax rate that went into effect in January, and they vowed to vote against the budget.
"Instead, Republicans went out of their way to increase the tax burden on middle- and lower-class working families, particularly those who make less than $50,000 a year," said Senate Minority Leader John Sparks, D-Norman.
Funding for K-12 schools was cut by 2.34 percent from last year's appropriation, but it received an increase of less than 1 percent when mid-year cuts are considered.
Mid-year cuts of about 7 percent already were imposed on state agencies as a result of state revenue collections falling far short of projections.
State Superintendent Joy Hofmeister praised lawmakers for their "herculean" effort to shield public K-12 schools from any further cuts.
"This budget represents a best-case scenario as we plan for the next school year," Hofmeister said.
The budget would also include an increase in funding for the Oklahoma Health Care Authority, which should prevent cuts to reimbursement rates for Medicaid providers such as hospitals and nursing homes, said agency director Nico Gomez.
"If this budget is approved, it may be close enough for OHCA to avoid any additional provider rate cuts by first looking at deeper administrative cuts and current savings," Gomez said.
Among the revenue raising measures that helped ease the cuts to agencies are:
— Reducing the tax rebate for marginally producing oil wells ($111 million);
— Tapping agency revolving accounts ($82.6 million);
— Requiring motorists to buy new license plates ($12.7 million);
— Elimination a so-called double deduction for state income taxpayers ($87.3 million);
— Reducing the earned income tax credit for the working poor ($25.9 million);
— Changes to the Cash Flow Reserve Fund ($132 million); and
— Tapping the treasurer's Unclaimed Property Fund ($35 million).
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Oklahoma state budget deal: http://bit.ly/1OLKJtT
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