State budget deficit could hit $1.5B

State finance officials said last week that the budget deficit for the 2016-2017 fiscal year will grow to $1,300,000,000.00.

One lawmaker said some estimates place that deficit at $1,500,000,000.00 with the possibility that state agencies could face up to a 25-percent across-the-board budget cut.

On Tuesday, the Board of Equalization was expected to consider certifying $5,851,664,555 in revenues for FY 2017 appropriations, which is $1.1 billion, or 15.9 percent, less than was appropriated for FY 2016. The board in December projected a budget hole of $900.8 million, or 12.9 percent.

The true budget hole the Legislature will face is larger than what the board considered, state officials said. By law, Rainy Day Fund appropriations and certain revolving fund authorizations are not factored into the board’s estimates. With those factors considered, there will be $1.3 billion, or 19.1 percent, less to appropriate for FY 2017.

Between the board’s initial FY 2017 estimate Dec. 21 and Wednesday, oil prices fell 21 percent from $34.74 per barrel to $27.45 per barrel, Oklahoma lost at least 500 more energy sector jobs and major energy firms announced plans for further employment reductions in the coming months. Since June 2014, Oklahoma has lost at least 12,500 energy sector jobs as oil prices have fallen 75 percent.

“It’s been more tough sledding since December, so the hole grew as expected. The untenable cuts to core services a hole like this could cause are avoidable when bold actions like the governor proposed are taken. There are responsible ways out of this when we show courage and resolve to do the hard work,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger.

Gov. Mary Fallin said she was meeting with lawmakers to search for ways to make up the shortfall. She suggested ending sales tax exemptions on a number of goods and services could be part of a tax package.