Education and health care will be spared from a 5 percent state budget cut for the 2003 fiscal year. Oklahoma legislative leaders announced the agreement for the $5.4 billion fiscal year 2003 budget Tuesday.

The agreement between House and Senate leaders would fund $35 million for health benefits for teachers and education support personnel.

Currently, the state and local school districts fund about 50 percent of teachers and 90 percent of support personnel's health insurance costs. The pact would raise that funding to 75 percent for teachers and 100 percent for support personnel.

Senate Appropriations Chair Enoch Kelly Haney, D-Seminole, said increasing health insurance will help keep teachers in Oklahoma.

Senate Pro Tempore Stratton Taylor, D-Claremore, said the agreement tightened the state's budget without hurting programs that are "critical to Oklahoma's survival."

"We've managed to shield the services that we think are the state's top priorities, namely public education and health care, in addition to earmarking funds for an increase in teacher and support personnel health benefits," Taylor said.

OU President David Boren said he was pleased with the agreement.

However, he said OU's budget will still be tough. OU already had a 2 percent cut that Boren imposed as a precautionary measure. Later, the legislature forced all agencies to cut their budgets by 1.6 percent.

Compared to the situation education could have faced, Oklahoma is fortunate, Boren said. OU already implementing its 2 percent cut makes the revenue shortfall now not hit so hard.

He commended Oklahoma's legislature for sparing education.

"I think sparing education is sending a really strong message that education is vital to the state," Boren said.

Education is an investment for the future, Boren said.

All three branches of education -- kindergarten through 12th grade, higher education and career technology -- will be spared from the cuts and will be funded at the same level as the adjusted budgets for the current fiscal year. That amount will not be known until June, but it is projected to be about $860 million or less, said Paul Sund, Senate communications director.

Other agencies that would be exempted from the cuts are the Oklahoma Health Care Authority, the State Department of Mental Health, the Department of Human Services, the Department of Veterans Affairs, the School for Science and Math, and the Schools for the Deaf and the Blind.

In order to spare education and health care and fund the teachers' health insurance increase, most state agencies would be cut 5 percent from their fiscal year 2002 level, a reduction of $276 million.

House Speaker Larry Adair, D-Stilwell, said this is the tightest budget Oklahoma has faced in 15 years.

"Because we have significantly less money this year, it is inevitable that some agencies will have to make do with less, but the budget cuts we are proposing are responsible in light of the situation," Adair said.

Sen. Cal Hobson, D-Lexington, said compared to many other states, the 5 percent cut is a modest reduction. Forty-four other states cut their budgets this year due to revenue shortfalls.

Also, the rainy day fund, which funds one-time emergency needs, would be used to balance the budget. Rainy day currently has about $340 million.

Rep. Bill Nations, D-Norman, said the Rainy Day Fund saved the budget from more severe cuts. Nations, House Higher Education Subcommittee chair, said he expects most of the rainy day fund to be used.

"It's better than I feared it might be," Nations said.

"I am quite pleased considering there's a national recession and the state budget is not strong."

Hobson stressed the significance of the rainy day fund. He said it is the reason education was able to be shielded from the cuts.

The fund was created in 1986 and this year's account is the largest it has ever been, Hobson said.

Getting the $38 million funding for OU's Weather Center and Oklahoma State University's Center for Sensors and Sensor Technology from a Corporation Commission underground tank fund rather than the Rainy Day Fund also helped, he said.

Next year's budget is estimated to be about $350 million or 6.2 percent less than the current fiscal year because of the decrease in oil and gas revenue and the national recession.

The next step will come in the next few weeks when House and Senate budget writers will draft the pact's elements into appropriation legislation.
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