Monday, October 26, 2015

Fallin: prepare plans for 10% cut in nonessential spending

As a state that is heavily dependent on oil and gas revenues, the recent collapse of energy prices is setting Oklahoma up for another "tough" budget year. Here's a press release from Governor Fallin, with some of my thoughts below:

Governor Mary Fallin Orders State Agencies to Develop 
Plans for 10% Cut in Nonessential Spending
A moratorium is also placed on nonessential out-of-state travel

OKLAHOMA CITY - With 2016 expected to be a challenging budget year, Governor Mary Fallin today issued an executive order requiring the chief administrative officer of every Oklahoma agency, board and commission to prepare written plans to reduce nonessential expenses by 10 percent for both the remainder of this fiscal year and for the entire 2017 fiscal year, which begins July 1. The executive order does not mandate any spending cuts; rather, it asks agency heads to plan for potential future cuts.

The plans are to include an explanation of how the dollars saved from the reduction will be reallocated to other needs within the agency. The written spending cut plans are due to each agency’s respective Cabinet secretary by Dec. 1, according to Executive Order 2015-46.

The governor also placed a moratorium on nonessential, taxpayer-funded, out-of-state travel for all state employees. Essential travel is limited to trips that are critical to core state agency functions, maintain professional accreditation unavailable in Oklahoma, are required by the federal government or are necessary to secure or maintain federal funding.

Also, effective Dec. 1, advance written notification must be given for proposed state payment of any:
  • Agency, state and public employee or officer membership(s) in any private or public organization;
  • Nonessential out-of-state travel for agency employees and officers that is wholly paid for by an entity other than the state, or;
  • Nonemergency purchase(s) that exceed $10,000.
“I’m asking every agency to start planning for potential spending cuts and to develop a strategy that protects essential services,” said Fallin. “It’s important we get ahead of this issue as we enter a difficult budget year. Families and businesses tighten their belts during lean times; our state agencies can do the same.”

Revenue for the appropriated state budget for the 2016 fiscal year has come in below projections. A significant shortfall is expected to occur in the next budget year.

Here's a few thoughts I had on this.

"Non-essential spending"
If it's non-essential, why is government doing it? This reminds me of the federal government "shutdown" in 2013. Republicans [ostensibly] believe that government should be small and limited, which should preclude "nonessential" spending.

"Nonessential out-of-state travel"
Why is state government paying for any nonessential out-of-state travel to begin with?

Governor Fallin campaigned in 2010 and 2014 on "right-sizing" state government. Budget shortfalls provide the opportune time to do just that, yet we continue to see that state government hasn't really shrunk under Republican leadership.

The folks at OCPA have been beating this drum for a long time (example from earlier this year). State spending reached an all time high in 2015. It's time Republicans got serious and did more than "trim around the edges" of state government.

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