By Associated Press Writer
updated 5/10/2010 10:27:10 AM ET 2010-05-10T14:27:10

Oklahoma lawmakers have just three weeks left in the legislative session to craft a budget and either agree on new sources of revenue or make big cuts to state agencies.

Closed-door negotiations are heating up as Democratic Gov. Brad Henry and Republican leaders in the House and Senate work on a budget for the upcoming fiscal year with about $1.2 billion less than they had to spend last year.

Federal stimulus funds and money from the state's Rainy Day Fund will make up some of the loss, but lawmakers will still be about $600 million short for the fiscal year that begins July 1.

All three sides say they are looking at suspending or eliminating some tax breaks to help fill the budget hole, but Henry's proposals to repeal two such programs were derailed last week in the House.

A Senate budget panel agreed to eliminate an income tax credit for certain investments in small business ventures and another for investments in qualified small business capital companies. The changes would have saved the state $31 million.

But both proposals failed to clear a similar committee in the House because of worries they would jeopardize an ongoing deal to land a new business in southeast Oklahoma that would have created 50 high paying jobs.

House Appropriations Chairman Ken Miller, R-Edmond, said he expects the panel to reconsider the bill after it's changed to address those concerns.

But the resistance to rolling back those two programs could foreshadow the challenge state leaders will face in eliminating expensive tax incentives important to powerful lobbyists.

Senate President Pro Tem Glenn Coffee said the inevitable opposition to cutting or suspending tax breaks is part of the reason the budget is crafted in confidential meetings.

"If you do that in an open forum, every idea that would be proposed, you'd have people ready to pounce to try and pull enough members so it couldn't even be discussed," said Coffee, R-Oklahoma City. "How much revenue can we agree on, what are those sources, and which ones can we pass — once we get an agreement on that, all of that will be public and will be thoroughly vetted."

Meanwhile, the Senate last week upheld Henry's veto of a bill that would have exempted Oklahoma-made firearms from federal oversight. State Sen. Randy Brogdon, R-Owasso, vowed to try again to override the veto.

The Senate also approved a measure to send to a public vote a proposed constitutional amendment designed to prevent the requirements of the new federal health care law from taking effect in Oklahoma. That bill is scheduled for a hearing in the House.

The resolution does not require the governor's signature to be placed on the November ballot.

One issue that does not appear to be on most lawmakers' agenda for this session is immigration.

Some conservative House members suggested they might bring up a bill similar to Arizona's new law directing police to question people about their immigration status if there is reason to suspect they are illegal.

But House Speaker Chris Benge, R-Tulsa, said last week he does not expect that proposal to be considered this year.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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