OKLAHOMA CITY — Oklahoma House and Senate leaders on Monday announced a $7.7 billion spending plan for the upcoming fiscal year that would tap into the state's savings and temporarily divert funding from pension plans and transportation projects to keep cuts to most state agencies at about 4%.


A crash in oil prices and the economic mayhem caused by the coronavirus resulted in an estimated $1.3 billion reduction in what lawmakers had expected to spend on the budget in February. Such a reduction would have led to cuts of about 17%, but House and Senate budget leaders agreed to temporarily divert payments to the state's public pension systems and a road-and-bridge program, sweep some agency revolving accounts and tap into state's reserve funds to minimize those cuts.


As a result, the proposed budget cuts to public schools were limited to 2.5%, or $78.2 million, which Senate Appropriations Committee Chairman Roger Thompson said would likely be covered by federal COVID-19 relief funds.


"We are not letting a virus roll back the historic investments Oklahoma has made in education the last few years," said Thompson, R-Okemah.


The funds being diverted from the public pension systems are additional payments the state has been making to improve their solvency, and the plan is to repay the diverted funds once the economy rebounds, Thompson said.


Thompson said Republican Gov. Kevin Stitt's office was not involved in the budget negotiations, and a spokesman for Stitt declined to comment on the details.


"The governor and his staff are continuing to review the budget package proposed by the Legislature and will not be commenting on specifics of the bills at this time," said Stitt spokesman Charlie Hannema.


The budget bills still must pass the House and Senate and be signed by the governor. If Stitt vetoes the budget, the House and Senate could override the veto with a two-thirds majority vote in both chambers. Republicans enjoy a super-majority in both chambers.


Rep. Emily Virgin, the House's Democratic leader, said she was disappointed that talks between the governor and legislative leaders broke down, leading to uncertainty about how much federal money could be tapped to help plug the budget hole.


"The governor needs to stop playing political games during a pandemic and use the money allocated to Oklahoma to fund state government," Virgin, D-Norman, said in a statement. "Oklahomans shouldn't suffer because of political power struggles between the Legislature and the governor."


While most state agencies will see 4% cuts, there are several exceptions. The Oklahoma Historical Society will receive a 15% cut, while the Department of Environmental Quality will be cut by 10%. Other publicly funded entities, including the state attorney general's office, district courts, the Oklahoma State University Medical Center and the Department of Tourism, will see budget increases.


The budget plan also calls for an increase in a fee that hospitals pay called the Supplemental Hospital Offset Payment Program, or SHOPP, from 2.5% to 4%, that would generate about $134 million annually to help fund most of the state's share of a Medicaid expansion.


Also included in the budget plan is a 4.5% pay raise for judges throughout the state, a move that will also automatically increase the pay for the state's elected district attorneys. That decision did not sit well with Oklahoma County District Attorney David Prater, who described the pay hike as "unconscionable."


"There's no way in the world that any elected official, including state judges, should get a raise during this budget crisis," Prater said. "Especially when so many people are out of work and struggling right now."


House Appropriations Committee Chairman Kevin Wallace said the 4.5% raise was less than half of what was recommended last year by the Board of Judicial Compensation.