Good Tuesday Morning -- So with one week – 4 days – remaining before the Constitutionally required adjournment at 5:00 p.m. on Friday, May 27th, here’s what we know today about the 2016 Oklahoma Legislative Session:
 
The state still faces a $1.3+ billion shortfall, against annual appropriations of +/- $7 billion.  There have been draconian measures discussed that have included 25% cuts in Medicaid Provider Rates and huge cuts in many other services.  As of end of business on Friday, there was still no announced plan for how to deal with this problem.  But we have been constantly told that we would not know how big the cuts would have to be until we saw the results of efforts to increase revenues to help close the shortfall.  The bigger the revenue increases the smaller the cuts and vice versa. 
 
In recent days, we have seen the following major actions by the Legislature:

• Defeat of a proposed increase in the state motor fuels tax on gasoline and diesel;
• Defeat of a proposed cigarette tax increase targeted to help fund Medicaid and protect Providers from huge rate cuts;
• Defeat of the reduction or elimination of several current business incentives;
• Withdrawal of a proposal to charge sales tax on services currently not taxed as a way to raise money for Teacher Pay Raises;
• Passage of some $250 million in state savings by “trimming tax breaks”, including:
  • Elimination of Double Deduction on State Income Tax Filings,
  • Reduce in the Earned Income Tax Credit on State Income Tax Filings,
  • Reduction of tax credits for financially at-risk oil and gas wells. 
  • Passage of  a $5.00 registration fee associated with the mandatory reissuance of state auto license plates; and 
  • Passage of legislation to increase compliance with sales tax collections for Internet purchases.

In a series of newspaper articles over the weekend, Legislative Leaders and Budget Writers have made the following statements:
 
“The $1.3 billion increase will be closed without the need for tax increases….
 
“The state can fill most of the shortfall with reductions in tax credits and deductions, Rainy Day Fund money, use of road bonds to free up cash and tapping some Agencies’ savings – called Revolving Funds. 
 
“Many agencies will see cuts from 5-7%, but budget writers should be able to protect public education and health care services…..
 
“The Oklahoma Health Care Authority has warned of Medicaid Provider Cuts of as much as 25%, but House Speaker Hickman said such talk was premature and such reductions will not be necessary……
 
“The proposed increase in the Cigarette Tax will not be taken up (again).  We’ve built our budget with a lot of other things……
 
“Also not to be considered in the one week remaining will be a broadening of the sales tax to include more goods and services, which was suggested as a way to fund teacher raises……
 
While there is lots of work still to be done, there is still a chance that they can finish business this week and not have to go into Special Session.  Early week actions on Monday and Tuesday will give us a good idea of whether they can get it all done or not by Friday at 5:00 p.m.