Coronavirus in Oklahoma: Stitt says state agencies may face budget cuts. State lawmakers don't plan to let that happen

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Update: This story was updated to include comments from Senate Democratic Leader Kay Floyd.

Both Republican and Democratic state lawmakers fired back at Gov. Kevin Stitt after he said Tuesday he believes 1-2% budget cuts are needed to deal with the state’s current revenue shortfall.

Because of the COVID-19 pandemic and sharp declines in the oil and gas industry, Oklahoma is dealing with a $416 million revenue shortfall for the last three months of the 2020 fiscal year. 

On Monday, the House and Senate passed three bipartisan bills that would pull over $500 million from the state’s Rainy Day Fund to fill the shortfall, getting state agencies through the end of June without budget cuts.

“The position the Legislature stated by veto-proof majorities Monday is not changing,” said House Speaker Charles McCall, R-Atoka. “The Legislature will not authorize cuts to core services during a pandemic response because the public needs its core services right now.”

Senate Pro Tem Greg Treat, R-Oklahoma City, echoed those thoughts.

“The Legislature is a co-equal branch of government vested with the authority to write the budget,” Treat said. “We take that role seriously. I am hopeful that the governor signs all the legislation that was sent to his desk this week.” 

A key component to tapping into all the funding passed by lawmakers on Monday is an official declaration from the state Board of Equalization stating there is a revenue shortfall. 

At the last minute, Stitt canceled a Monday board meeting to officially declare the shortfall and later said he would not sign two of the three bills sent to his desk. 

At a press conference Tuesday, Stitt said one reason for his actions was that lawmakers had specifically excluded using Rainy Day funding to prevent any budget cuts for digital transformation initiatives, which were supposed to receive $15 million from the state this year and are a priority of Stitt. 

“When it is just one agency that is singled out to be cut, that was part of our reasoning,” Stitt said. “So we are back at the drawing board and every option is on the table… When so many Oklahomans are struggling, we may have to take a 1-2% cut in our state agencies.” 

House Minority Leader Emily Virgin, D-Norman, tweeted Tuesday evening that digital transformation initiatives would possibly lose less than $250,000. She said the governor holding “the whole thing hostage because he didn’t get his way on one issue” is “unconscionable.” 

“The Legislature managed to come together in a bipartisan way to make sure Oklahomans still have access to core services in the midst of a pandemic, and he’s threatening to thwart our efforts,” Virgin wrote. 

“I’m calling on Governor Stitt to set aside the petty power struggle and do what’s right for the people of Oklahoma who are currently navigating an unprecedented crisis. Sign the bills, governor, and keep our core services funded.”

Senate Democratic Leader Kay Floyd, D-Oklahoma City, said her caucus also strongly opposes any cuts to state agencies and urges Stitt to call a new meeting of the state Board of Equalization. 

"Every day, dedicated and hard-working state employees are on the front lines of Oklahoma's efforts to combat the spread of COVID-19," Floyd said. "Now is not the time to be reducing much needed resources for state agencies."

If Stitt vetoed the bills, the Legislature could override him based on the intense support the legislation received. 

But since the Board of Equalization still has not set another meeting date, it’s unclear if that would matter. 

Stitt also hinted Tuesday that he is trying to plan for the next two state budget cycles, which will also likely be impacted by the current economic havoc. 

"We are in the middle of negotiations of the budget for not only 2020 but 2021. And in nine months, we'll be back up in here in January talking about the 2022 budget," Stitt said. "Just trying to think through that. I'm bringing everybody together to think through exactly what our revenue is, what our savings account is, where we can cut expenses."