Gov. Mary Fallin is issuing executive orders for the heads of state authorities, boards and commissions to begin plans to cut their budgets by 10 percent in light of the impending revenue shortfalls.
She also has taken steps to instruct state bureaucrats to look into the sale of surplus equipment and surplus real estate.
The budget shortfall last year was calculated at $611,000,000.00 and this year’s estimates may climb past one billion dollars.
Oklahoma is overly dependent on oil and gas revenues. The price of a barrel of oil on the world market has dropped in half over the last 18 months and that slowed domestic production of both oil and natural gas.
Oklahoma must balance its budget according to state law and the Oklahoma Constitution. Unfortunately, current budgets include debt service on ill-advised bond packages because some legislative leaders have abandoned a “pay as you go” fiscal policy.
To offset the last budget deficit, lawmakers took millions from the Rainy Day Fund and cut appropriations to some agencies while instructing them to make up the difference with surplus funds.
The energy situation may actually get worse as Obama’s illegal treaty with Iran will allow that nation to flood the international market with cheap oil to damage America’s domestic energy industry.
Kudos to Gov. Fallin for taking bold steps to deal with a crisis before it grows. The challenge will be for agency chiefs to cut spending. They don’t like to do that and they are not good at it.
A tax increase is not the answer as hundreds of energy workers are losing jobs. It’s time for some austerity and a good time to cut out the fat in state government.