In January, the state will issue its financial statements for the 2016 fiscal year. These are perhaps the most important documents produced by state government. They will show the actual effect of the energy sector’s downturn on state government spending.
This provides important context to state budget policy. Most media coverage focuses on the impact of the downturn on the dollars appropriated by the Legislature; however, this is only a minority percentage of overall state spend.
The financial statements will show the actual retraction or growth of state spending and will provide true perspective.
These statements will cover a period of time which many Oklahomans were convinced that state government was spending much less money than before. I suspect that the financial statement may show this was not the case.
As legislators are returning to the Capitol in preparation for the coming session, updated legislative budget documents are now showing that once supplemental appropriations are taken into account, the appropriation levels for the state’s fiscal year 2016 actually increased to what appears to be a record high of more than 7.1 billion dollars.
Also in January, the House of Representative will elect its next Speaker and approve the new rules that govern the House.
In many ways this marks the transition point between two generations of House leaders. For the past few years, power has been mostly held by the group of legislators who were elected in the partisan swing of 2004 and 2006.
Most of the next leadership team were not exposed to the partisan transition process and never knew a time when the partisan composition of the House was in doubt.
I certainly hope that the new leaders will understand, defend and carry on the important and ongoing reforms of their predecessors while recognizing and avoiding their policy shortfalls.
The last years have been an important time of transition, but progress can be quickly undone if new leaders do not have an understanding of the abuses of years past which had afflicted the Legislature with a culture of power politics.
In February, the legislative session starts. This year’s Legislature will have to immediately come to terms with a complicated budget process.
The current Legislature will inherit a massive, built-in shortfall passed along by their predecessors. The shortfall is a result of a three-year, sub-optimal practice where the Legislature has paid for ongoing expenses with one-time revenue sources. The cumulative effect of this practice has been built-in to each successive budget’s deficit.
Making matters a bit more challenging, last year’s Legislature inexplicably issued many millions of new debt and the payments on the debt will add to the built-in shortfall.
It’s quite clear that the current legislative budget process simply isn’t working. It’s a closed-door system where a few power brokers negotiate the budget behind closed doors.
I believe some of the fiscal malpractice wrought upon current and future generations of Oklahomans could have been mitigated if more legislators had a stronger sense of ownership in the budget development process.
I hope our new house budget officials will bring the process out from behind closed doors and transform it into an open process which leverages the abilities of all House members through a member-driven, committee system.
Past budget officials have recognized the problems with the current process, and have at time given an appearance of trying to reform, but usually enact little meaningful or lasting reforms.
The new generation of leaders has an opportunity to bring about immediate, meaningful and lasting reforms.
As a taxpayer and an Oklahoman, I hope they will!
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