State leaders are called to a special session starting Dec. 18 to address the shortfall in the budget for the current fiscal year, Oklahoma's governor said.

Oklahoma Gov. Mary Fallin said there's a hole in the budget of about $111 million because of loss in revenue from a cigarette tax. As a result of lingering fiscal problems, the governor said the state department of health and state department of human services may be faced with cuts by early next year.

Budget plans are in the works, but instead of waiting, the governor said she was giving notice to lawmakers on when they need to return to work to tackle the issue in earnest.

"I'll be working with legislative leaders and others with the goal of having at least the outline of an agreement ready for legislators later this month," she said in a statement.

Fallin vetoed most of House Bill 1019X, legislation aimed at fixing the state budget, last month because it came "perilously close" to wiping out the state's available one-time funds and savings.

The bill called for tens of millions of dollars in cuts to state agencies, but leaned in part on an increase in the gross production tax on legacy oil and gas wells from 4 to 7 percent. The oil and gas tax measure was met with criticism by those working in and supporting the energy sector in the state.

The state budget office in October said the general revenue fund, the main operating fund, was 12.4 percent below the September estimate. For the first three months of the fiscal year, the fund was 9.5 percent below collections from the previous year.

State Treasurer Ken Miller said this week that gross tax receipts paid to his agency in November were up 12 percent, or $98.6 million, from the same time last year at $893.4 million. Taxes on oil and gas production generated $52.7 million for the state in November, up 54.8 percent from last year and 1.3 percent higher than the previous month.

Miller's office said new revenue generated last month from a 1 percent tax increase on production from horizontal drilling into the state's shale basins to 4 percent totaled $7.8 million.

Oklahoma is home to about 4 percent of the total petroleum reserves in the country and accounts for as much as 5 percent of the total crude oil production.

"As I travel across the state I see signs of positive economic activity, and I believe the future looks bright for the state," the governor said.

She added, however, that revenue coming to the state treasury isn't enough to establish a strong economic foundation.

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