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Keating Fund Diversion Hits Schools Hardest, Drains Money From County Road Projects

A new analysis by the Senate fiscal staff indicates that education would be the biggest loser if Governor Keating carries through with a plan to use additional motor vehicle revenues on transportation.

"Governor Keating has indicated if he doesn't get his new toll roads, he's going to go after money that has historically been earmarked for education," said Senator Kelly Haney, chairman of the Senate Appropriations Committee.

"Before the Governor takes another step in that direction, we need to know what the impact will be on our schools and other entities that currently receive motor vehicle revenue.

"We've said all along that Governor Keating's program would hit education hardest and the latest analysis proves that."

In recent weeks, Governor Keating has proposed diverting 5 percent of motor vehicle fee revenue to the Oklahoma Department of Transportation. The money in question is currently earmarked for education, county and city roads and general fund uses among other things.

The latest Senate analysis detailed what would happen if lawmakers had implemented a 5 percent diversion of motor vehicle fee revenues from current recipients in drafting recent budgets. The following table illustrates how much each entity would have lost under the Keating funding diversion plan.

Keating Motor Vehicle Funding Diversion Plan Impact

FY '96 FY '95 FY '94


$ 9.0 million cut $ 8.6 million cut $ 8.3 million cut

Gen. Fund

$12 million cut $11.4 million cut $11 million cut


$ 3.6 million cut $ 3.4 million cut $ 3.3 million cut


$ 775,000 cut $ 735,000 cut $ 708,000 cut


$ 302,000 cut $ 294,000 cut $ 283,000 cut

Wildlife Fund

$ 7,551 cut $ 7,354 cut $ 7,081 cut

The Governor's proposed reduction in general fund money would also hit education because the majority of general revenue is earmarked for the public schools.

"We're talking about a double whammy for education. First, Governor Keating strips the public schools of their earmarked motor vehicle revenue, then he raids the general fund's fee money, most of which would have gone to education," said Senator Haney.

"Once all the damage is totaled, you're looking at about a $15 million cut for the S public schools under the Keating plan each year. That's a pretty devastating blow to quality education."

The Seminole legislator pointed out that education wouldn't be the only casualty under the Keating funding diversion plan. Counties and towns also receive motor vehicle fee revenue, most of which is earmarked for county road and bridge construction.

"This is the old robbing-Peter-to-pay-Paul syndrome. Governor Keating wants to take road money away from our counties and towns so he can turn it over to ODOT to spend on state highways.

"Instead of local officials making decisions about pressing road needs in their communities, Governor Keating will be relying on the state bureaucracy to decide where the money will be spent. Instead of money being earmarked for rural road improvements, Governor Keating will be diverting the funding to urban needs.

"At a time when our Governor is preaching rural development, it seems a little counterproductive to advocate a plan that would take money away from rural roads and bridges," said Senator Haney.

The Senate budget leader also noted that the Oklahoma Department of Transportation received a 15 percent increase this year, or approximately $30 million in new funds. ODOT's only funding setback this year came at the hands of the Republican U.S. Congress, which cut about $15 million of Oklahoma's share of federal highway funding.

"The Oklahoma Legislature has been increasing funding for roads and highways while S the Republican Congress has been cutting federal transportation money. Instead of draining state funding from education, Governor Keating should focus his attention on Washington and use his relationship with Newt Gingrich to get Oklahoma its fair share of federal road funding," said Senator Haney.

Oklahoma is considered a "donor" state on the federal level, giving more gas taxes to the federal government than it receives back in transportation funding.

Even with the federal cuts, the Oklahoma Legislature still appropriated a record budget for ODOT this year, totaling $639 million in state and federal funds.

"I know Governor Keating has been trying to portray ODOT as some kind of neglected step child, but in reality, the state highway department has been one of our top budget priorities.

"We've been making a concerted effort to increase funding for highways, but it doesn't make sense to drain money from education and county roads to accomplish that goal."

"We all want to put more money into roads, but Governor Keating has to realize that his proposed funding diversion will have real and damaging impacts on other important entities."

Contact info
Senate Communications Division (405) 521-5774