Why everyone missed the Rainy Day borrowing story

About a month ago, Oklahoma Finance Secretary Preston Doerflinger reported to senior state officials that he had to borrow money from the Rainy Day Fund to keep the government afloat.

He didn’t use those exact words, or else the dozen or so reporters in the room (including me) might have taken notice. As far as I can tell, no one covered that bit of news.

That’s why it was a bit surprising Monday when Senate Democrats, who were questioning a midyear appropriation from the fund, asked how much had been borrowed. State Sen. John Sparks’ said he wondered how lawmakers could earmark money out of an account that had been depleted.

At the committee meeting on Monday, Senate staff said the Office of Management and Enterprise Services had transferred $380 million out of the Rainy Day Fund. An OMES spokesman later said it was just $240.7 million, but he confirmed that the fund was indeed empty — at least temporarily.

So why did everyone miss this big news the first time around? Two reasons.

The Feb. 21 meeting also happened to be the same where Doerflinger announced the second consecutive revenue failure in Oklahoma’s budget. The announcement triggered an automatic, statewide $34.6 million spending cut. That news (naturally) led every story from the meeting.

The reveal was a tad bit understated. Not to fault Doerflinger, but I didn’t exactly remember what he said because it didn’t seem that big when he said it. Specifically, he said this:

“I, in my official capacity, have the ability to borrow from month to month for cash-flow purposes. I’ve been doing that; I do it every year. My predecessors did the same thing.

“Again, that authority is placed in my capacity within statute to make government work while the legislature isn’t in session, and as we experience things from month to month like even a business might from a cashflow standpoint. This has been very difficult, and it proves to be increasingly difficult, and I know why (former Finance Secretary) Scott Meacham looks as young as he does now, not doing this anymore.”

Doerflinger went on to say how much had been borrowed at that point, and he said the only place he could borrow enough money from was the Rainy Day Fund. He also noted that it has to be paid back.

That’s on me. I missed it. I remembered the Scott Meacham joke, but not the rest. Out of a presentation that lasted nearly 50 minutes, this entire part took about three.

Maybe it was the revelation that the Rainy Day Fund had been completely emptied that drew my interest this week. Maybe it was the realization that with three months left to go in this budget year, some officials still aren’t sure that the money will be paid back.

Senate Appropriations Chair Kim David, R-Porter, said Monday that at least $4 million has to be put back before June to pay for a supplemental appropriation to the Department of Human Services. David’s committee advanced the midyear funding bill during the meeting, but Oklahoma City Democrat Kay Floyd asked what happens if the money doesn’t come back.

“Then, senator, I would think we’re in bigger trouble than we are,” David replied.