State revenues are dropping as the price of a barrel of oil plummets. The state budget was set with the assumption of $50 a barrel oil and now it has dropped to $35 a barrel.
State officials have informed agencies that they will get $176,900,000 less through the end of this fiscal year in June.
The biggest cut goes to common education, about $46.8 million.
This doesn’t mean the state is going bankrupt. It just means that state agencies that spend and spend and spend will now have to show fiscal responsibility.
The cuts won’t affect some revenue streams because they come from the federal government, fees, grants, contracts and other sources.
Look for the liberal newspapers and TV stations to start bombarding the public with stories about how the state will implode without a significant tax increase. Higher education will raise tuition and increase student loans.
That is the exactly the wrong thing to do.
State government is bloated, with a few exceptions (state auditor, state insurance commissioner, attorney general and a few others). For bureaucrats, especially in public education, it’s easy to spend someone else’s money. Oklahoma spends far too much on public school administration and too little on teacher salaries.
Democrats are blaming cuts in the state income tax that haven’t even gone into effect and won’t because they are canceled if there is a budget shortfall.
The short-term solution is to tighten belts and eliminate waste and duplication. The long-term solution is to cut taxes and spur economic development toward a diversified economic base.