Governor Stitt Calls Legislature Into Special Session
April 26th, 2020 – The Board of Equalization met Monday and declared a revenue failure for the current fiscal year, clearing the way for money to be transferred from the state’s Rainy Day Fund to plug holes in state agency budgets through June 30.
Last week, the Legislature petitioned the Supreme Court to order the Board to meet and make a determination regarding the projected revenue failure. The Court then ordered the Board to respond. Instead, the Board decided to meet on Monday. The Board declared a revenue failure of $416 million for the remainder of the fiscal year. The declaration means that funds approved by the Legislature in early April to bridge state agencies through the remaining months of the fiscal year can now be appropriated to those agencies.
The Supreme Court, as expected, dismissed the Legislature’s petition as moot following the Board meeting since there was no longer a controversy to be ruled upon.
In addition, the Board projected that the official revenue estimate it certified in February for the upcoming fiscal year would be short by more than $1.3 billion due to the current economic recession caused by the COVID-19 virus and the collapse of the energy market. The Board certified $8.2 billion in estimated revenues for the Legislature to use to build the Fiscal Year 2021 budget, which it is currently working on. At Monday’s meeting, however, the Board said the state would likely only collect approximately $6.8 billion during the 12-month period from July 1, 2020 to June 30, 2021.
After the announcement, Gov. Stitt called on lawmakers to plan on cutting agency budgets in the upcoming year, an option that many lawmakers have rejected over the prior weeks but before the likelihood of a $1.3 billion shortfall was presented. Lawmakers have said they would rather use funds from savings to cover any shortfall next year. However, there is less than $600 million in the Rainy Day Fund after lawmakers transferred more than $500 million just weeks ago to shore up this year’s budget.
Soon after the shortfall projection was announced, both House and Senate budget leaders seemed wary of the $1.3 billion amount and questioned the Board’s data it used to arrive at the figure. In addition, budget leaders said they expect some of the $1.5 billion in federal funds the state has received for COVID-19 relief can be used to offset some of the shortfall.
The two sides are seemingly at a stalemate, so a budget agreement may not be coming next week.
The governor did announce a new plan for reopening businesses and churches this week. The Open Up and Recover Safely (OURS) Plan would use a phased in approach for restarting the state’s economy Phase One would allow personal care businesses, such as salons, to reopen by appointment only beginning Friday, April 24. On May 1, the plan would allow movie theaters to reopen, restaurants to reopen their dining facilities and churches to gather using social distancing guidelines. If after two weeks, there has not been a resurgence in positive cases of COVID-19 and increased hospitalizations, Phase Two would go into effect with additional businesses allowed to reopen. Phase Three would begin on June 1 with details to come later.
April 12th, 2020 – The Legislature convened Monday for the first time since March 17 to address a revenue failure in the current fiscal year and to open a thirty-day special session that provides the Governor expanded emergency powers during the coronavirus outbreak.
The House of Representatives and the Senate passed three bills to avoid cuts in services during the current Fiscal Year 2020 budget, which ends on June 30. Low energy prices and the COVID- 19 pandemic have devastated revenue collections over the last five months and created an estimated $416 million shortfall in the budget.
The Legislature voted to withdraw nearly $504 million from the Constitutional Reserve – or “Rainy Day” – Fund to prevent any current fiscal year cuts to agencies. Senate Bill 1053 takes $201.6 million from the Rainy Day Fund and deposits it into the Revenue Stabilization Fund. Senate Bill 199 takes $302.3 million from the Rainy Day Fund and deposits it into the General Revenue Fund. Senate Bill 617 authorizes the Office of Management and Enterprise Services (OMES) to withdraw up to half of the balance of the Revenue Stabilization Fund to avoid cuts to agencies and the 1017 education fund.
The Legislature also convened in special session and approved House Concurrent Resolution 1001X, which affirms Gov. Kevin Stitt’s declaration of a catastrophic health emergency (CHE). The resolution also allows the governor to tap up to $50 million for emergencies without legislative approval for the next 30 days.
The two bills signed by the governor would provide enough money to make agencies whole through the end of April but would result in cuts to agency budgets in May and June. House Speaker Charles McCall and Senate President Pro Tempore Greg Treat sent out two joint statements this week refusing to return and said the Legislature has provided more than enough funding to fully fund agencies through the end of the fiscal year. They also noted that all three bills passed with veto-proof majorities.
In addition to efforts to shore up the current budget, lawmakers and the governor are still negotiating a budget for Fiscal Year 2021. The budget chairs said this week they do not yet have an agreement but are getting close. Once an agreement is in place, the Legislature will return to the Capitol to consider the budget plan.
Given the ongoing coronavirus crisis, the likely scenario for the remainder of the 2020 session would be for the two chambers to reconvene for a few days to consider a budget agreement and then recess to a call of the chair until sometime in May to deal with remaining policy bills.
When lawmakers do return to the Capitol to deal with policy bills, all their work will likely be done on the House and Senate floors rather than in committees. This week, the House moved most of the active Senate bills from their assigned committees to the General Calendar and will likely move the rest at a later date. The Senate will possibly follow suit with House bills the next time they convene.
April 6, 2020: The Legislature will reconvene today after being in recess for nearly three weeks. Legislative leadership announced yesterday they will return for two days to deal with a revenue failure for the current fiscal year. They will also convene in special session to allow Gov. Kevin Stitt to evoke certain authorities related to the coronavirus pandemic.
Gov. Stitt told reporters the state will have a revenue failure of approximately $416 million for the remainder of the current Fiscal Year 2020 budget, which began on July 1, 2019 and ends on June 30, 2020.
Because collections have now fallen significantly under 95 percent of the certified estimate from February 2019, the state finance secretary will declare a “revenue failure” today, which will trigger automatic across-the-board cuts to state agencies. The cuts correspond to the size of the revenue failure. Gov. Stitt said the shortfall will result in 6.2 percent across the board cuts for all appropriated agencies.
Lawmakers will convene to vote to tap money from the Rainy Day Fund and other funds to back-fill the entire $416 million failure to ensure all agencies are made whole for the remainder of the current fiscal year. The Rainy Day Fund has a balance of more than $800 million, and there is more than $300 million in growth revenue from the 2019 fiscal year sitting in the General Revenue Fund, which was excess funds that came in above the FY-2019 budget estimate, the exact opposite of a revenue failure just one year prior.
The Oklahoma Unemployment Security Commission reported this week that there were nearly 45,000 unemployment claims filed for the week of March 28, more than doubling the previous record of 22,000 the week of March 21. The record number of unemployment claims prior to this March was just under 10,000 filed in 1991. In addition, oil prices continue to trade at less than $29 per barrel.
The Catastrophic Health Emergency Powers Act in Title 63 of Oklahoma’s statutes authorizes the governor to call a CHE. His powers under the emergency can be found at the following here.
Gov. Stitt has said he needs the CHE to streamline operations and coordination between the state and county health departments, allow first responders to access health information so they know if the person they are coming into contact with has been diagnosed with COVID-19 and to temporarily remove licensing restrictions so healthcare professionals can return to the field immediately to assist with the response.
Lawmakers in both the House and Senate will be following strict social distancing guidelines while at the Capitol, limiting the number of people who can be in either chamber to 10 or less at any given time and checking temperatures of everyone who attempts to enter the Capitol. Both chambers will be utilizing a skeleton crew of essential staff during the upcoming week with all others continuing to work remotely.
The Capitol will remain closed to the public next week. Only elected officials, state employees who work at the Capitol and credential members of the media will be allowed to enter. If a person has a temperature of more than 100.4, they will be denied entrance. Both chambers will be live-streaming floor proceedings so the public can follow the activity live online.
April 2, 2020: Governor Stitt has filed an executive order this morning calling for a Special Session of the Oklahoma Legislature due to the COVID-19 pandemic.
The executive order is here: https://www.sos.ok.gov/documents/executive/1927.pdf
It appears the Special Session would begin next week.
March 24, 2020: Governor Stitt that non-essential and non-critical infrastructure businesses must close for 3 weeks starting March 26 through April 16. This is for those counties experiencing community spread of COVID-10. The Governor amended his previous executive order to reflect this change. Businesses deemed part of the critical infrastructure may remain open, as well as restaurants and bars that offer take-out and delivery food service.
Additionally, the amended order also directs all people over the age of sixty-five (65) and who have serious underlying medical conditions to stay at home.
To view the Governor’s executive memo, which provides guidance on which businesses are considered essential or critical, click here.
To review federal guidance on the essential critical workforce, visit: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce