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Stitt, lawmakers in a budget standoff as state revenue failure looms

Stitt, lawmakers in a budget standoff as state revenue failure looms

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Stitt signs budget bills

Gov. Kevin Stitt signs bills on Thursday in Oklahoma City. BARBARA HOBEROCK/Tulsa World

OKLAHOMA CITY — Gov. Kevin Stitt on Thursday signed two bills to fund state government through the end of April but called on lawmakers to return to the Capitol to provide additional dollars for the next two months after one of his priority projects was not fully funded.

Stitt said he would not sign the third bill in a budget stabilization package sent to him by lawmakers and accused House leadership of playing “Washington, D.C.-style politics.”

Legislative leadership, however, said the governor has the bills on his desk needed to resolve an impending revenue failure in the state budget. They have no plans to return to the Capitol to backfill a cut made to Stitt’s priority project, a digital transformation fund.

“The House and Senate remain united by our actions to swiftly stabilize the budget, and call on the governor to finish the job,” said House Speaker Charles McCall, R-Atoka. “Further legislative action is not needed when a stabilized budget is already on the governor’s desk.

“There is no benefit to having the budget certainty the Legislature swiftly provided jeopardized because of opposition to a noncritical issue representing 0.003% of the budget. This is especially true when the Legislature just gave the governor authority to allocate $50 million at his discretion during his catastrophic health emergency declaration.”

Stitt also backed off on his desire to cut state agencies by up to 2% for the current fiscal year, but said the state needs to tighten its belt for future fiscal years.

The governor did not sign Senate Bill 199, which sends $301.3 million from the state Rainy Day Fund to the General Revenue Fund. Accessing those dollars is contingent on action by the Board of Equalization.

After the House’s passage Monday of the three revenue bills, Stitt abruptly canceled the Board of Equalization meeting, citing technical difficulties with the measures. The panel was poised to declare a revenue failure.

The Senate then passed all three bills and sent them to Stitt.

Stitt on Thursday said House Leadership was using the situation to “play Washington, D.C.-style politics and sneak in some last-minute changes while Oklahomans are hurting.”

He expressed concern that the digital transformation fund was not spared cuts when lawmakers passed bills to fund the rest of government.

Stitt said digital transformation is more important now than ever before, citing 165,000 people who have applied for unemployment and 33,000 state employees working from home.

The Oklahoma Employment Security Commission is federally funded and does not receive a state appropriation. In monthly reports to lawmakers, OMES officials do not mention that the digital transformation fund was to be used for upgrades to the OESC or for telework for state employees.

In addition, a bill passed in 2017 allowed OESC to use a portion of unemployment taxes for technology upgrades, which is ongoing.

Unemployed residents have reported widespread problems and long waits with attempts to file for unemployment.

Stitt said the digital transformation fund, which has $8.4 million in it, was shorted about $930,000.

“But really the question is why would we fund $450 million and 100% of government for April, May and June but exclude one small piece,” Stitt said. “That is the question.”

The budget shortfall for 2020 is expected to be $416 million to $450 million.

House Budget and Appropriations Chairman Kevin Wallace, R-Wellston, said lawmakers had conversations with Stitt’s staff about the budget plan and no cuts were snuck in.

Wallace said Stitt’s Budget Secretary Mike Mazzie, a former Republican senator from Tulsa, was attempting to tell lawmakers how to handle bills, but they had already decided on a course of action in light of the circumstances. Mazzei then got frustrated and ended a phone call, Wallace said.

Wallace said Stitt may not be getting the information he needs. He said the budget bills were posted late Friday, so they could be read.

He said the first time he heard Stitt’s office had a problem with one of the bills was shortly after noon on Monday.

Although Stitt said Thursday he was not pursuing agency cuts for 2020, Mazzei has asked agencies to resubmit budgets with a 3% cut, said Senate Appropriations Chairman Roger Thompson, R-Okemah.

The governor could tap into the $50 million lawmakers gave him to handle the COVID-19 crisis to address the transformation fund, leaders said.

“I am fully funding state government for April,” Stitt said. “There is plenty of time for the Legislature to come back and fix this for May and June. That is what I am asking them to do. We had an agreement. I am going to stick with the agreement.”

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