Governor vetoes budget deal – second special session?

Posted on: 11/22/17

On Friday, Nov. 17, the same day the Senate passed HB 1019X, The Budget Agreement, Gov. Mary Fallin vetoed all but five of the 170 sections of the bill and will ask the Legislature to return to a new special session in December or January. In the veto message, Gov. Fallin stated, “I believe this action is necessary because this bill by the Legislature does not provide a long-term solution to the recurring budget deficits. I view this bill as I have line item vetoed, as an amendment to the General Appropriations Bill passed for this fiscal year. It preserves the safety net on a temporary basis until the Legislature comes back for a second Special Session, which I intend to call in the near future.”  

The safety net referred to in the veto message are the sections of the bill that did not get vetoed. Those sections appropriate funds to the health agencies, including the Oklahoma Health Care Authority, the Department of Mental Health & Substance Abuse Services and the Department of Human Services. In a video message explaining the veto, the governor stated, “Those agencies…will now have the ability to keep going for several months more until we are able to find a permanent, viable solution for recurring revenue for the next budget year.”  For details, click here.

On Nov. 8, the House fell five votes short of passing HB 1054X by the constitutionally required supermajority. The revenue raising measure would have generated more than $186 million this fiscal year ending June 30 and more than $454 million in SFY ‘19. Had the House passed the bill to the Senate by the required 76 votes, the Senate would easily have passed the bill to the governor.  

On Nov. 9, the Oklahoma Health Care Authority Board met and approved a 9 percent across-the-board rate reduction for SoonerCare providers and a 4 percent cut to nursing facilities to take effect Dec. 1. This action was necessary because of the failure of HB1054X.  Even though the governor did not veto the health agency sections of the Budget Agreement bill, it is unclear at this time if there will be a Medicaid provider rate cut Dec. 1, and, if so, what the cut will be. State agencies are required to comply with the balanced budget provisions of the Oklahoma Constitution. While pertinent sections of HB1019X were not vetoed, other sections cutting appropriations to other agencies were vetoed. Without the cuts to other agencies, there could be insufficient cash flow to allow the health agencies to stave off provider cuts at least for a while. OHCA has scheduled a special board meeting for Dec. 1 and the agenda has not been announced.

The governor is urging the Legislature to re-visit revenue raising measures in the next special session. Enactment of HB 1019X would have avoided any Medicaid provider rate cuts through the end of this fiscal year, barring a revenue failure. Without new revenue, the state could face a budget deficit of more than $600 million going into the next legislative session, which convenes in February. For a further explanation of HB 1019X, see the OHA member email from Nov. 17. (Lynne White)