OKLAHOMA CITY — Leaders in the Republican-controlled Legislature reached an agreement Thursday with Gov. Mary Fallin on a $7.1 billion budget that includes major boosts in funding for public education, health care and state infrastructure improvements.
The budget for the fiscal year that begins July 1 increases spending by nearly $270 million over the current year's state budget, with growth in funding focused on what Fallin described as "targeted" priority areas for lawmakers. The measure still must be drafted into a bill, approved by the GOP-controlled Legislature and sent to the governor.
"I believe the best way we can prioritize spending is to look at those key areas of government that need help, prioritize those, but also hold the line on spending in other areas," Fallin said. "In the end, I think the people of Oklahoma have been served very well by what's been put together in this budget."
The budget includes a $74 million, or 3.2 percent, increase in funding for public schools and an additional $17 million for the current fiscal year to help reimburse schools for increased costs for teacher health benefits. State colleges and universities received a $33 million, or 3.5 percent, increase.
But while Republican leaders praised the boosts in education funding, Democrats complained the additional revenue is inadequate to cover growing class sizes and new mandates that have been imposed on public education in recent years.
"Once again we are asking our hardworking school teachers and administrators to do more with less," said Senate Democratic Leader Sen. Sean Burrage. "While the Republicans who put this deal together will tout the 'increased funding' to education in this budget over the last year, education is still getting $200 million less than they did in 2008."
The budget also includes a $40 million, or 4.3 percent, increase in funding for the Oklahoma Health Care Authority to help cover an expected increase in the number of enrollees in the state's Medicaid program once new tax penalties are in place under the federal health care law for those who do not have health insurance. These so-called "woodwork eligibles" are low-income Oklahomans who currently are eligible for Medicaid but are not currently enrolled in the program.
The Department of Human Services also received a $44 million, or 7.5 percent, increase to help pay for the costs of implementing the court-ordered Pinnacle Plan designed to improve the way the agency provides services to abused and neglected children in its care. Fallin said the extra money also will help the agency reduce the waiting list for services provided to the developmentally disabled.
Other agencies that received substantial increases in funding were the Department of Mental Health and Substance Abuse Services (5.6 percent) and the District Attorneys Council (16 percent). The budget also includes $3 million for a new Drought Relief Fund, $3 million for the Governor's Closing Fund, $13 million for Oklahoma State University's Medical Authority and $30 million to a fund that will be used to begin maintenance and construction costs for new state buildings.
One agency that did not receive an increase in funding is the Department of Corrections, which had requested a nearly $70 million boost in appropriations to help pay for a growing prison population and raises for correctional officers. State leaders said they were concerned about a discrepancy in the amount the agency reported it has in various revolving funds that could be tapped for operational expenses.
"While they are a critical function of state government ... they do have some revolving funds that are going to be looked at a little more diligently," said Rep. Scott Martin, chairman of the House Appropriations Committee. "With that we didn't feel like it would be prudent to go ahead and give them an increased appropriation right now."
Corrections spokesman Jerry Massie declined to comment on the budget agreement and said Thursday that agency officials needed more time to review it.
Fallin said a key to reaching a deal was an agreement last week on a plan to cut taxes, overhaul the workers' compensation system and develop an eight-year, pay-as-you-go approach to selling state assets to pay for capital maintenance.
The tax cut, which was given final legislative approval in the House on Wednesday, calls for a reduction in the top rate from 5.25 percent to 5 percent — effective Jan. 1, 2015 — with a second cut to 4.85 percent in 2016 if state revenues continue to rise. Because the implementation of the tax cut was delayed, however, the estimated $237 million total impact on the state budget won't be realized for several years.
The bill to slash the tax rate also diverted $120 million over the next two years to pay for improvements to the Capitol. That money was not included in the total amount appropriated in the fiscal year 2014 budget.