Cigarette Tax Burns College Budgets

Cigarette Tax Burns College Budgets

Oklahoma State Capitol in Oklahoma City, Okla. State Legislators are considering taking higher education funds to offset the loss from the state’s failed cigarette tax. (Provided/Wikimedia Commons)

State funding for higher education could be in for an additional three percent slash if state legislators decide to implement further budget cuts to state agencies in an attempt to offset the loss of projected funds from the state’s failed cigarette tax.

Last month the Oklahoma Supreme Court struck down the legislature’s $1.50 cigarette cessation tax as unconstitutional, dropping a projected $215 million from the Fiscal Year 2018 budget. In response to the loss in revenue, lawmakers began inquiries into the hypothetical impact of an additional 3.17 percent across-the-board cut to agency budgets to compensate for the loss in revenue.

For the Oklahoma State Regents for Higher Education, this would translate into the loss of $24.5 million in addition to the $36 million already cut as part of the FY 2018 budget allocations, according to Angela Caddell, the Regents’ Vice Chancellor for Communications.

“Following the higher education budget reduction for FY 2018, a potential additional cut would result in additional negative impacts to the state system of higher education, including the threatened continuation of tuition waiver programs such as concurrent enrollment, the Academic Scholars program and the Regional Baccalaureate Scholarship,” Caddell said.

The possibility for an additional reduction in funding comes as both the State Regents and the state’s institutions for higher education have been scrambling to adjust budgets to an overall decrease of 17.8 percent since FY 2012.

“Our state system of higher education continues to implement significant cost cutting measures already, including sharing faculty and administrators between institutions, consolidation of back-office administrative functions, joint academic degree programs between institutions, travel reductions, early retirement options and consolidation of campus sites,” Caddell said.

Other areas impacted by the cuts could include course offerings for the Spring 2018 semester, degree completion initiatives, institutional accreditations and the ability for institutions to match research and grant funding opportunities from federal programs such as National Science Foundation or NASA, according to Caddell.

Along with impacting the budget for statewide programs and initiatives, the 3.17 cut would also be reflected in the budget of each of the state’s public colleges and universities. For the University of Central Oklahoma, which already has the lowest taxpayer contribution rate per student out of Oklahoma’s 13 public universities, the full extent of a potential additional cut will remain unclear until after legislators meet to discuss the issue, according to UCO President, Don Betz.

“We’ve studied our scenarios in advance and we know where we would make changes, but we still don’t know the extent of those changes should they come. It’s really up to the legislature whether or not they will increase revenue or cut agencies across-the-board,” Betz said.

In response to the failure of the cigarette tax, Gov. Mary Fallin announced that the legislature would convene for a special session on Sep. 25, to address the resulting shortfall for the Department of Human Services, the Department of Mental Health and Substance Abuse Services and the Oklahoma Health Care Authority.

“A special session is the best option,” Fallin said. “Failure to meet in special session would mean $215 million would be cut mostly from these three state agencies. These agencies and the people they serve cannot sustain the kind of cuts that will occur if we do not find a solution.”

Without legislative intervention, Fallin said that DMHSAS would run out of state appropriations in November, OHCA would run out of state funds in January and DHS would run out of state funds in May.

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