The Rainy day difference: Who will budge on the budget?

When it comes to resolving remaining spending issues for Fiscal Year 2010, the question is not whether there are disagreements among key players at the Oklahoma state Capitol, but how significant those differences are.

The foregoing question triggers a second: Among the “Big Three” (the governor, the Speaker and the President Pro Temp) who will budge first on the budget?

While most specific budget questions remained unresolved at the end of the second legislative week, an important big picture question will begin to resolve itself soon. That is, how much of the Constitutional Reserve – better known as the Rainy Day Fund – will be left for use in the next fiscal year when the Legislature adjourns in May?

There could be as little as $43 million (Governor Brad Henry’s stated goal), more than $240 million (House Speaker Chris Benge’s preference) or something in between ($150 million, President Pro Temp Glenn Coffee’s objective).

Looked at a different way, Benge said Thursday his understanding of the pre-State of the State framework was to spend $223 million (three-eighths of the reserve), but Governor Henry wants to use $480 million of it for this fiscal year. In terms of using that reserve, there appears to be a difference of $257 million between the Benge and Henry positions.

The process adjusting FY 2010 expenditures will reach critical mass in the next week. On Thursday, each of the “Big Three” expressed hopefulness about the process ahead, respect for one another and confidence in their own positions.

Thursday afternoon, Governor Henry told Capitol reporters, “The legislative leadership and I have made and will continue to make some very difficult decisions.” The chief executive said he spoke to the other two Wednesday, and “It’s news to me that there is tension.” Looking back to the budget framework consensus reach just before the session opened, he said, “On the specifics of the Rainy Day Fund, we never came to any agreement on the amount to access from the Rainy Day Fund.”

Reporters asked if negotiations are under way. “Yes, we’re negotiating,” Henry replied. “I’m concerned about the stimulus dollars. We don’t want to put those at risk” with cuts to matching funds. The governor restated his belief that all triggers for accessing the reserve, “have been met for the year.”

Asked about Treasurer Scott Meacham’s speculation that vetoes might be exercised in the coming weeks, Henry said, “I believe the veto word came up in the context of a hypothetical question. We are a long, long way from discussions of any veto. We will work it out and find a consensus. We’ll continue to work within the major framework agreement.”

Henry is cautious about holding back too much Rainy Day money, saying, “Of any money we carry over, three-eighths of it would be inaccessible for FY 2011.”

At mid-day Thursday, House Speaker Chris Benge had a different interpretation of the Rainy Day framework for the 2010 budget: “We believe have an agreement to spend three-eighths of the RDF. The difference is apparently between the $480 million the governor is willing to spent from the fund, and the $223 million we are willing to spend.”

Concerning the $257 million difference, the Speaker said he, the President Pro Temp and the governor, “are going to visit some time soon so we can understand where we are. On the talk of a veto, I think it’s unfortunate that a veto threat has been brought up at all. It’s not constructive. I am a little perplexed at that talk, but I’m not concerned about our position.”

One reporter asked if the veto talk was posturing. Benge said, “I don’t think the governor is posturing. What the treasurer said [earlier] may be posturing.”

Senate President Pro Temp Glenn Coffee told reporters at a late morning briefing, “I’m confident we have a firm basis for agreement. I heard the treasurer used the word ‘veto’.” Coffee said he wanted a closing Rainy Day balance of perhaps $150 million. He reflected, “It is important not to overspend the Rainy Day fund because we have little wiggle room as look ahead. “

Coffee continued, “The governor personally experienced a tough revenue crunch when he came into office. I don’t believe he would want to leave anything similar to his successor. It is inappropriate to pick a fight after the framework for an agreement has been reached. “ Concerning the executive budget submitted last week, Coffee said, “The governor’s budget was a start, but as they say, we use those for door stops around here.”

In perhaps the biggest news of the day, Senator Coffee said he would seek to suspend rules to accelerate the budget process somewhat. The current deadline is one week from Monday [i.e. February 22], but if the rules could be suspended we could get it done next week.” In response to a question from CapitolBeatOK, Coffee specified the Senate could begin to process specific House budget numbers by “Tuesday or Wednesday. I would actually hope that we can be getting some of this ready by the end of next week.” Coffee said he is “running the traps” running the traps with legislators on both sides of the aisle to assess their reactions to the idea.