State House OKs plan to use revolving funds

The Legislature took a step toward following Gov. Mary Fallin’s call for using money in revolving funds to help tackle the budget crisis. Under a bill that passed the House, the Office of Management and Enterprises Services would work with agencies to set financial criteria for each fund.

More than a month after Gov. Mary Fallin suggested ways for the state to gain $900 million in recurring revenue, the Oklahoma Legislature took a baby step Monday toward following her plans.

Money is at a premium for state officials as they struggle with a massive budget hole.

In her State of the State speech, Fallin said $125 million could be used from revolving funds, or agency savings accounts.

Each year, many agencies collect more than they need for operations.

Under a bill that passed the House on Monday, the state Office of Management and Enterprise Services would work with agencies to set financial criteria for each fund.

If the money in the fund goes beyond a certain set level, it could go directly into the state’s coffers for general appropriation.

Another option would be to lower an agency’s fee and fine structure so that it doesn’t accumulate so much money.

House Bill 3058, by Rep. Tom Newell, R-Seminole, now goes to the Senate. Fallin applauded its passage. “The transfer of monies from these accounts is often mischaracterized as one-time revenue, despite the fact the majority of these accounts replenish yearly,” Fallin said. “These funds are there every year. They are not onetime funds.”

The process described in the bill would first be used for the 2018 fiscal year, which starts, July 1, 2017.

However, lawmakers could still tap revolving fund money for the 2017 spending plan through their normal budget process.

The state finds itself with $1.3 billion less to spend for the fiscal year starting July 1 than it had to spend for the current fiscal year.

Oklahoma leaders have been cutting the state’s income tax rate for the last decade, while increasing tax breaks given to industry. Then the bottom fell out of state revenue with an oil bust that began in 2014. Other revenue suggestions from Fallin, include: •A $1.50-per pack cigarette tax to raise, $182 million. •Eliminating some sales tax exemptions and adding sales tax to some new services, $200 million.

•Eliminate personal income tax double deduction, $85 million. •Apportionment reform, $40 million. •Cash flow reserve fund reform, $120 million.