Last Monday afternoon the Governor walked to the fourth floor and entered the office of the Speaker of the House. One hour later the two had laid the framework for a budget agreement. The two Co-Presidents Pro Tempore of the Senate also agreed to the framework and all three parties worked late into the night to finalize the details. By Tuesday morning, a basic budget had been agreed on by all parties.

The framework was built on the General Appropriation Bill that had been passed two months earlier. The additional funding made by the standing committees was added to the original bill. These amounts had been worked out in the different committees during the past two weeks. This included agreements worked out by both the House and Senate chairs of the different committees.

The additional 185 million of the spillover funds were also agreed upon. This money is the extra money that is being collected this year that is over and above budgeted amounts that is put into the Rainy Day Fund. The Rainy Day fund will be at its maximum amount when the 2007 budget year is over on June 30^th.

Additional agreements for the spillover fund included many different provisions. One element is additional funding for education. There will be an average of $1,000 per-teacher pay increase, weighted toward veteran teachers and those with advanced degrees. Unfortunately, this money will go through the formula, which will hurt most schools in this area.

Higher education will also receive an increase of $33 million for the State Regents for Higher Education to cover operational expenses. Capitol projects for universities will also receive an additional $16.5 million to be divided between the two comprehensive universities and the other four-year colleges.

There will also be a four-point tax relief package for the tax-payers in Oklahoma. One part will speed up the reduction of the state’s top marginal rate to 5.25%. Other parts will provide a childcare tax credit for stay at home parents. The franchise tax on most small businesses will also be eliminated. The state will also offer a back-to-school sales tax holiday during three days in late summer.

A tuition lock program is also part of the budget agreement. This bill will mandate for universities to offer a four-year program that keeps tuition the same for four years. A permanent funding source for the Oklahoma Higher Learning Access Program was also agreed upon. This funding also brings reforms to the program. The new guidelines dictate that students maintain a 2.5 GPA from their junior year on.

The state will also put $10 million into the Oklahoma Teacher Retirement System as an initial down payment on a long-term historic reform to fund that system. This is the first step in an agreement that will put the system back on track to become fiscally stable. Each year the state will continue to put an extra $60 million a year into the system

The State Emergency Fund will receive $10 million to cover the costs of the snow and ice storms earlier this year. Our rural fire departments will also receive $2.5 million for equipment and $1.4 million for firefighter training. The Centennial Commission will also receive another 15 million for the state’s birthday celebration.

This agreement has been put into various Appropriation and Budget bills that will begin being passed on the floor of the House and the Senate on Tuesday. The entire package should be passed by Thursday and sent to the Governor. This will allow the Legislature to finish its work by Friday and adjourn sine die until next year. Although the agreement took two months longer than needed, it did get passed in time for the Legislature to end in an orderly and timely manner.