OKLAHOMA CITY — Lawmakers are concerned that a spiraling drop in oil prices could result in a second revenue failure for the current fiscal year.
A number of scenarios to deal with it are under discussion, including additional cuts in general revenue to state appropriated agencies, House Appropriations and Budget Committee Chairman Earl Sears, R-Bartlesville, confirmed Wednesday.
“If oil continues to drop, I feel there will be another revenue failure for 2016,” Sears said in response to questions about the budget.
The regular session begins Feb. 1, when lawmakers will craft a fiscal year 2017 budget. That budget is expected to be at least $900.8 million less than the current fiscal year budget.
A revenue failure for fiscal year 2016 was declared in December. As a result, Finance Secretary Preston Doerflinger made a 3 percent across the board cut in general revenue to state appropriated agencies.
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Doerflinger can make across the board cuts to state agencies, but only lawmakers can make targeted cuts, Sears said.
“He can’t do targeted cuts, but we can,” Sears said.
Sears emphasized that no decision has been made on how lawmakers will proceed.
Sears, Doerflinger and Senate Appropriations Chairman Clark Jolley, R-Edmond, are expected to meet Thursday to discuss numerous funding policies regarding the 2016 budget, Sears said.
One item under consideration is increasing the cuts to some state appropriated agencies up to 5 percent from 3 percent, he said. Such a move would allow targeted cuts to cushion the blow to some agencies.
House Republicans caucused on Tuesday to discuss the budget. Senate Republicans met Wednesday to discuss the budget.
“As oil prices continue to drop, I think it is likely you will see an additional revenue shortfall announced because of our dependence on gross production taxes,” said Sen. Brian Crain, R-Tulsa.
