January 2, 2019The Journal Record |
OKLAHOMA CITY – As lawmakers decide how to divvy up more than $600 million in projected new revenue, there is one agency that won’t be fighting for a piece of it.
State finance officials are projecting Oklahoma will see significant growth in its available funding for fiscal 2020. That begins in July, and lawmakers will spend the spring building the budget for it. Although most other state agencies have asked for additional funds for building maintenance and construction, pay increases or service level revival, the state’s transportation infrastructure leaders said they won’t. The state’s contracting trade group and officials within the Oklahoma Department of Transportation said the funding hike they saw this year should be the last one they ask for in the next few years.
Oklahoma contracts out its bridge and highway work. The Association of Oklahoma General Contractors announced that although infrastructure should be the state’s top priority and is the state’s most widely used service, its members feel the new revenue should go into other core services, such as the state’s education, corrections and health care systems.
The trade group’s executive director, Bobby Stem, said his organization is focusing on the gratitude it needs to express about other funding.
Oklahoma uses a few sources to pay for its infrastructure. The long-standing gas tax, which costs 17 cents per gallon, pays for some of it. Roughly 8 cents is slated for ODOT, but some of it has been diverted because of budget cuts. The Rebuilding Oklahoma Access and Driver Safety Fund, also known as the ROADS fund, is another major source of state funding. That fund is guaranteed money off the top, which is known as an apportionment, and it largely comes from income taxes. That fund has a cap of $575 million, but it is rare for funding to reach that level. However, when lawmakers passed their tax package this year, they adopted an increase in motor fuels taxes, and it is going straight to the ROADS fund, ensuring it meets the full $575 million cap.
Transportation officials and contractor advocates had been requesting lawmakers allow that funding level for a decade, Stem said.
“You spend 10 years asking for something,” he said. “Once you get it, you don’t want to turn around and ask for more.”
And because of the increase in motor fuels taxes, lawmakers won’t have to use as much income tax revenue for transportation projects. That shores it up for other general revenue funded agencies, such as education, corrections and health care, he said.
Gratitude is going to be important for his members this year, he said. A majority of lawmakers will have less than two years of experience, which means trade groups, agency officials and other Capitol regulars will be making first impressions.
“Are we always just asking for more, more, more, or do we want to be one of the hands on the rope pulling Oklahoma up?” Stem said.
ODOT spokeswoman Terri Angier said the agency’s official budget request won’t include funding increases for similar reasons.
However, she did note that the agency has lost about $50 million in diverted gas tax money, and that the hits have affected pavement quality on the highways. That is an issue officials plan to focus on in the coming years, she said.
Until now, the main focus has been the state’s structurally deficient bridges. In 2004, the state had more than 1,100 of them. Through improvements and maintenance, that number has dropped to 150, she said, and the agency has improvement plans finalized for each of them.
“We really want to focus on finishing up on finishing our bridge backlog, and we think we’ll get there by 2021,” she said.
Because of law changes that the Legislature enacted – including tax increases on oil and gas production, motor fuels and cigarettes – and a strengthening economy, lawmakers are projected to have $612 million in new revenue at their disposal when building the budget.
State agency officials in all departments are working on their budget requests, which detail any appropriation hikes they argue are appropriate. Several have requested increases. The state’s Medicaid agency request includes a net $44 million increase to, among other things, reinstate pre-recession provider rates. The Department of Corrections’ budget request includes $884 million for new beds and $91.7 million for inmate hepatitis C drugs. The District Attorneys Council’s fiscal 2020 request includes a 5 percent raise for the agency’s 238 prosecutors, which is expected to cost about $1 million.
That rosy forecast, like the state’s economy, hinges on the oil and gas industry. The projections are based on prices in the $50-per-barrel range and roughly on current employment numbers, as well as on all of those components holding steady throughout fiscal 2020. Prices hit a high for the year in October, but they’ve fallen sharply since, according to The Wall Street Journal’s crude futures tracker. That high was at about $74 per barrel. On Wednesday afternoon, the price was at about $46.