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Oklahoma Budget Agreement for 2010 fiscal Year Lacks Specifics

From Associated Press

Late last month, Gov. Brad Henry announced that he and leaders in the House and Senate had agreed on a plan to close a nearly $1 billion hole in the current fiscal year's budget, but details about where that money will come from remain murky.

Henry, House Speaker Chris Benge and Senate President Pro Tem Glenn Coffee apparently don't agree on how much to spend from the state's constitutional Rainy Day Fund, a state savings account that has a balance of nearly $600 million.

Henry has proposed spending $485 million from the fund to help close the gap in the current budget year that ends June 30. Lawmakers need to come up with about $530 million — the rest will be absorbed through across-the-board cuts to agency budgets that average about 7.5 percent each.

Under the agreement, supplemental funding would be provided to ease those cuts for education, health care and the state prison system.

The governor and legislative leaders also have access to about $700 million in federal stimulus funds, although that money is limited to spending on Medicaid and education.

Both Benge and Coffee said Friday they will not support spending more than $225 million from the reserve fund on the fiscal year 2010 budget. Benge, R-Tulsa, acknowledged Thursday he was surprised to see the governor's proposal, but downplayed its effect on the agreement.

"I don't think it's an agreement breaker," Benge said. "It doesn't stop anything. We will use stimulus money for the balance, and I think it will work out just fine."

Benge said House staff currently is preparing bills on the 2010 budget that will begin winding their way through the legislative process next week.

Coffee, R-Oklahoma City, said those bills will propose spending just $225 million from the Rainy Day Fund.

"We probably will send him a bill that will spend less of the Rainy Day Fund, and he can make his own decisions," Coffee said, "but the spending priorities that were worked out will be consistent with the agreement.

Meanwhile, legislative leaders and the governor still haven't started negotiations on the budget for the 2011 fiscal year — where lawmakers will have about $1.3 billion less to spend than they did last year.

Henry has proposed a host of potential revenue enhancements to close the budget gap, including a one-year moratorium on tax credits, consolidating state agencies, collecting taxes on Internet sales and a transportation bond issue.

Henry, Benge and Coffee all have agreed there won't be any tax increases this year. Coffee said virtually all other ideas "are on the table," although he acknowledged he has no specific plans for how to close the huge gap in next year's budget.

"I have not come up with any specific proposals that originate with me," Coffee said. "If you're asking me which ones I'm advocating for today, I don't have any for you."

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