Senate Minutes with AJ Griffin: Oil prices impacting energy states

I believe one of the most basic traits shared by Oklahomans is resilience.  Throughout this state’s history, we have been faced with tremendous challenges which we’ve met with grit, tenacity, and the faith that ultimately we would prevail.  I am just as confident of our ability to work through tough economic challenges.

Although citizens in many parts of our state may not realize the impact of prolonged drought, the farmers and ranchers in this part of Oklahoma understand what the lack of rain can really mean. Just looking at the combined economic losses from 2011 and 2012, our state took a $2 billion hit as a result of drought.

Low oil prices are also impacting energy states, and there is no question that Oklahoma is feeling the effects. The price of oil is about half of what it was last summer. One reporter said there had been about 600 energy jobs cut so far, and there could be more.

What happens in agriculture and in the oil industry ultimately impact revenue collections at the state level. We also have seen the cumulative effect of increasingly relying on earmarks to provide funding streams for specific services and programs.

Another factor decreasing the amount of state revenue available for the legislature to appropriate is the many economic incentives and tax breaks approved over the years.  These can cost hundreds of millions of dollars, but lawmakers have never required studies to show if they are generating more than they are costing.

With the first six weeks of the 2015 session behind us, the Senate has successfully passed several measures to help us get a better handle on budget issues moving forward so that we can ensure the process is one that best serves the people of our state.  We’ve passed bills to reform how we approach economic incentives, requiring them to be reauthorized and requiring a process to determine if they are fulfilling their intended purpose, or if they should be reformed or repealed.

We’ve also approved a measure for the citizens to vote on a proposed constitutional amendment. Rather than considering both budget bills and policy bills each year, the Legislature would consider policy measures only every other year, enabling us to focus more attention on the budget, giving greater scrutiny not only to the process, but how all state dollars are being used and how we can redirect resources to those areas of government charged with providing the most critical services to Oklahomans, like education, public safety and health.

Finally, we have begun a series of in-depth budget hearings with the 12 state agencies receiving more than 90 percent of state appropriations. The reality is it will be extremely difficult for any agency to avoid appropriations reductions in light of the shortfall we face in the coming budget year. These hearings will give state agencies a forum to explain where their dollars are currently going, how they plan to handle potential cuts and enable us to help them identify potential savings or other ways to help soften the impact of the shortfall.

The bottom line is that unlike Washington D.C., we have a constitutional mandate to write and pass a balanced budget.  Difficult decisions will have to be made, but ultimately, I believe we will emerge with a much-improved process as we manage the resources entrusted us by the citizens of this great state.

As always, please feel free to contact my Capitol office with any questions or concerns you may have about legislation or other issues impacting our state at 405.521.5628 or at griffin@oksenate.gov.