To end a projected revenue shortfall of $157 million, the Office of Management and Enterprise Services today declared a revenue failure for Fiscal Year 2016. As a result, state agencies receiving monthly general revenue allocations will see those allocations reduced by three percent beginning in January.
The three percent reduction will reduce general revenue allocations by $176.9 million for the remainder of FY 2016. General revenue allocations needed to be reduced by at least $157 million to end the projected shortfall.
The declaration was made following the Board of Equalization on Monday receiving an updated FY 2016 revenue estimate that projects a shortfall for Fiscal Year 2016, which began July 1 and ends June 30, 2016. The updated estimate projects FY 2016 General Revenue Fund (GRF) collections will miss the official estimate upon which the FY 2016 appropriated state budget was based by 7.7 percent, or $443.3 million.
By law, if GRF collections are projected to fall more than five percent below the estimate for the remainder of the fiscal year, the OMES director must declare a revenue failure and initiate mandatory appropriation reductions to end the shortfall and maintain a balanced budget.
Most, but not all, appropriated agencies receive monthly general revenue allocations.
OMES Director Preston L. Doerflinger informed agency directors of the percentage reduction amount Wednesday. Agencies were informed Dec. 15 that a revenue failure declaration would be likely in FY 2016.
A list of the reduction amounts for each affected agency can be viewed here: http://www.ok.gov/OSF/documents/FY16%20GR%20Reductions%20-%20Summary.xlsx