As many are aware, our state budget has taken a massive hit in the recent COVID-19 pandemic. With the temporary closure of many businesses, and the subsequent loss of income and sales and use tax collections, and with the plummet of oil and gas prices, we are significantly below revenue projections and collections compared to last year.
The good news for the current fiscal year, FY2020, is we have enough in savings to cover the gap so core services will not need to be cut for the remainder of this year. Fiscal Year 2021, for which we are now in the process of drafting a budget, is a different story.
When the state Board of Equalization met in February, before the COVID-19 pandemic, the board certified $8.244 billion for FY21. With the effects of COVID-19, the Oklahoma Tax Commission has recommended that amount be reduced to $6.878 billion, a reduction of $1.366 billion, or 16.6%.
House and Senate budget leaders are working right now to determine how best to fund core government services next year without asking each agency to take that large of a cut. We have some federal stimulus money available, but there are restrictions on how that can be used. It cannot be used to fill revenue gaps or supplant funds already budgeted for this fiscal year. We also have money in savings and revolving funds. It is possible we could look at issuing bonds or considering other apportionments. Right now, everything is being discussed.
The Legislature is scheduled to come back into session Monday, May 4, to work on the budget and to potentially consider some policy bills. In the meantime, chairs of each Appropriation & Budget subcommittee are looking at the agency budget requests made of them for FY21 to see where efficiencies or savings could be realized.
As this situation evolves, I will keep you informed.
In the meantime, please take appropriate precautions as we begin to reopen some businesses and other venues throughout our state. Please also keep praying for the wellbeing of our citizens and for the comfort of those who have lost loved ones.
Avery Frix serves District 13 of the Oklahoma House of Representatives. He can be reached by phone at (405) 557-7302 or via email at email@example.com.