Questions raised by special session call

OKLAHOMA government’s continuing budget shortfalls seem to owe much to bad financial practices and questionable planning. A call to convene a special session inadvertently reinforces that impression.

The Oklahoma Supreme Court recently ruled a smoking-cession “fee” approved by the Legislature was a straightforward cigarette tax increase passed in violation of constitutional guidelines. This has created a budget hole estimated at $215 million. Most of the money was earmarked for three agencies.

Gov. Mary Fallin wants to convene a special session to address this problem, rather than allowing the Legislature to provide supplemental funding when it reconvenes in regular session next February. But the financial claims made in calling for a special session raise additional questions about agency funding, spending and oversight.

According to the governor’s office, the Oklahoma Health Care Authority, the state’s Medicaid agency, would have received $70 million from the cigarette tax. That accounted for about 7 percent of the agency’s total appropriation, according to the governor’s office. The Department of Mental Health and Substance Abuse Services would have received $75 million, which represents 23 percent of its appropriation. And the Department of Human Services would have received $69 million, which represents about 10 percent of its appropriation.

If lawmakers don’t replace the cigarette tax money, Fallin’s office says, the Oklahoma Health Care Authority will run out of state funds by January, the mental health department will do so in November, and DHS will be out of state appropriations by May.

The state’s budget year started July 1 and runs through June 30, 2018. So one wonders: How could a 7 percent cut in state appropriations leave the OHCA without any state funding roughly halfway through the fiscal year, even accounting for lost federal matching funds? That suggests the agency will run out of state appropriations by February even if it receives tobacco money. Were agency officials really planning to spend 93 percent of their state appropriation in the first six months and then stretch the remaining 7 percent over the last half of the year?

Similarly, one would expect a 23 percent reduction in state appropriations to leave the mental health department without state appropriations roughly threefourths of the way through the fiscal year, not less than halfway through it.

It’s possible the agencies’ expenses are front-loaded. But are they that front-loaded?

The news release from the governor’s office referred only to agencies running out of state appropriations and state funds. That’s notable, because state appropriations account for only a share of funding at these agencies. According to a Senate report, state appropriations accounted for about 18 percent of total expenditures at the OHCA in the 2017 budget year. At mental health, state appropriations represented nearly 75 percent of expenditures. And at DHS, state appropriations represented less than 29 percent of agency expenditures.

There may be a good explanation for the apparent financial discrepancies. If so, state officials need to provide it immediately, and with excessive transparency. Because as it stands now, citizens may have reason to question if politicians’ budget statements are more a public relations game than reality.