Legislative Leaders Announce Budget Agreement, Pact Includes Teacher Health Benefits

(Oklahoma City) Legislative leaders have reached a budget agreement that would protect public education and a variety of health care programs from the budget axe, in addition to funding an increase in health benefits for teachers and education support personnel.

In order to accomplish those goals and still balance the state budget, however, state reserve funds would have to be tapped and the bulk of state agencies would be forced to absorb a 5 percent budget reduction in the coming fiscal year, according to legislative leaders.

House Speaker Larry E. Adair and Senate President Pro Tempore Stratton Taylor announced the agreement Tuesday, saying the pact would give legislative budget writers the direction that they need to finish the state appropriations process. That process has been complicated by lagging revenue collections and a projected $350 million budget shortfall next fiscal year.

This is the tightest state budget we've faced in 15 years, but I think we were still able to accomplish some great things with this agreement, namely an increase in health benefits for teachers and education support personnel. Given the budget constraints we are facing, boosting health benefits is a tremendous accomplishment. Because we have significantly less money this year, it is inevitable that some agencies will have to make do with less, but the budget cuts we are proposing are responsible in light of the situation, said Speaker Adair (D-Stilwell).

We wanted to tighten the states budget belt in the most responsible manner possible, without hurting programs that are critical to Oklahomas economic survival. Weve managed to shield the services that we think are the states top priorities, namely public education and health care, in addition to earmarking funds for an increase in teacher and support personnel health benefits. Other agencies will have to sacrifice, but with the state facing a multi-million dollar budget hole, there really wasnt any other choice, said Senator Taylor (D-Claremore).

House and Senate leaders have been conducting budget negotiations for the last several weeks, trying to balance state needs and priorities with declining revenue collections.

The key points of the legislative budget agreement include:

• Health care and education priority areas shielded from budget cuts The three branches of public education K-12 public schools, higher education and career technology will be funded at the same level as the adjusted budgets for the current fiscal year. Other entities receiving the same exemption include the Oklahoma Health Care Authority, the State Department of Mental Health, the Department of Human Services, the Department of Veterans Affairs, the School for Science and Math, and the Schools for the Deaf and the Blind.
  
  
• Teacher and education support personnel health benefits increased Currently, the state and local school districts fund approximately 50 percent of the health insurance costs for teachers and 90 percent for support personnel. The budget agreement would raise those levels to 75 percent for teachers and 100 percent for support personnel. The cost of increasing the coverage is approximately $35 million.
  
  
• Selected state agencies targeted for 5 percent budget cut To help offset projected revenue shortfalls, the bulk of state agencies would be cut 5 percent from their FY 2002 level a total reduction of $276 million. The state rainy day fund would be accessed to help balance the state budget.

The two legislative leaders applauded House and Senate budget negotiators for their work on the agreement, particularly the chairmen of the House and Senate Appropriations Committee.

Because of the hard work of Rep. Mike Mass and Sen. Kelly Haney, we have the earliest legislative budget agreement in the past decade, said Sen. Taylor and Speaker Adair.

In the weeks to come, House and Senate budget writers will be drafting the elements of the latest agreement into legislation so that they can be considered by members of the respective legislative chambers.

Slumping natural gas prices and the national recession have created budget problems for Oklahoma in recent months, causing revenue shortfalls and budget cuts in the current fiscal year and a projected $350 million shortfall next year. If the current budget agreement is ultimately implemented as is, the state of Oklahoma would have an approximately $5.4 billion budget in fiscal year 2003.