May 25 (UPI) -- A budget proposal on the table for 2018 in shale-rich Oklahoma leaves the state with too many funding gaps, Gov. Mary Fallin said.
Legislators in Oklahoma agreed to a budget that cuts funding for most state agencies. The bill cuts funding by about 5 percent for most state agencies, but gives modest support for healthcare and public safety. Funding for the state attorney general's office was by far the biggest winner, with an increase of 59 percent from the previous budget.
The new measure, which is still under consideration, relies on a higher sales tax for vehicle purchase and sin taxes to address an $878 million hole in the budget.
Gov. Mary Fallin said crafting a budget is never an easy task, but this one leaves too many holes in state coffers.
"It is not an ideal budget, but it avoids draconian cuts to our core services such as education, health and human services, and public safety," she said in a statement. "Unfortunately it leaves many agencies facing cuts for the sixth year in a row."
By her estimate, state lawmakers would take their seats next year, which is an election year, $400 million in the red.
Oklahoma is one of the top contributors to total U.S. oil production, accounting for about 5 percent of the nation's total output. Lower crude oil prices curbed exploration and production activity last year and the state's economy faltered as a result.
Compared with this time last year, oil and gas sector revenue for Oklahoma expanded as energy markets recovered. State Treasurer Ken Miller in early May said gross receipts for the government where higher for the third time in four months.
"Coupled with falling unemployment, increasing oil field activity, and rising consumer confidence and business conditions, indications are the Oklahoma economy is on the upswing," he said in a statement.
Separately, state leaders introduced legislation this week that could draw as much as $18.9 million in new revenue though support for the oil and gas industry.
"The energy industry is the backbone of our state's economy and when the industry prospers our state prospers too," Sen. Bryce Marlatt, chairman of the senate energy committee, said in a statement.