State lawmakers will have $9.6 billion to spend next year, budget board says
State lawmakers will have roughly $9.6 billion to spend in the upcoming fiscal year.
The figures certified by the State Board of Equalization on Tuesday are $1.1 billion, or 14%, more than the $8.5 billion spending limit certified by the board in December.
Despite the rosy budget projections, Gov. Kevin Stitt and top state lawmakers expressed caution about spending beyond the state’s means as projected recurring revenue beyond the upcoming fiscal year is estimated to be roughly $7.9 billion.
“We always have to be careful about our recurring revenue, and that’s something that kind of gets lost in the weeds because we can appropriate $9.6 billion, but a lot of that is one-time cash,” Stitt said. “It’s like if you have a rich relative that died and you inherited $1 million this year. You’re not going to have that inheritance every single year.”
The budget figures certified by the board, chaired by Stitt, serve as a starting point for Oklahoma legislators to build a state budget for the upcoming fiscal year.
Typically, the final state budget is an agreement between legislative leaders and the governor.
"As far as I'm concerned, on a state level, I think we still need to enter this year being very conservative," said Senate Appropriations Chairman Roger Thompson, R-Okemah, who plays a key role in crafting the budget.
Stitt said the improved revenue projections are partly due to his decision to fully reopen Oklahoma’s economy in June, despite the ongoing COVID-19 pandemic.
State budget experts say federal stimulus packages, recovering oil and natural gas markets and a national COVID-19 vaccination program that is gaining steam have all contributed to Oklahoma’s improved budget figures.
“Vaccines occurring and businesses recovering have the economy and revenues rebounding well enough to replenish reserves, set strong agency budgets and grant tax relief to continue kickstarting Oklahoma’s recovery," said House Speaker Charles McCall. "Keeping the economy open is continuing to benefit Oklahoma, both for our citizens and now for our state budget.”
Stitt is hopeful the additional funds could be used to help bolster state savings accounts. In his executive budget, Stitt proposed putting $300 million in state savings accounts after state lawmakers dipped into the accounts to offset a revenue shortfall last year.
Now, Stitt thinks the state could afford to save more than $300 million, in addition to replenishing road and bridge funds and state pension funds that were redirected last year to fill budget holes.
In the current year’s $7.7 billion budget, most state agencies were cut by about 4%. It's unclear whether state agency budgets will be made whole in the upcoming fiscal year.
There’s likely some agencies that can stay at that reduced funding level because they were able to trim some of the fat, Stitt said.
Thompson estimates state lawmakers have nearly $1 billion in obligations to cover on top of the recurring revenue for state agencies. That figure includes an estimated $200 for Medicaid expansion, $115 million for property tax reimbursements and $600 million to replace one-time funds used in the current budget.
“If you talk about $1 billion in my bank account, that’s a lot of money, but as a state, when you’re dealing with a $30 billion budget, that goes pretty quick,” he said.
If there’s a true reason to spend additional funds, state lawmakers will look at it to make sure the needs of Oklahomans are addressed, he said.
The Oklahoma Legislature must pass a budget before the end of the legislative session at 5 p.m. May 28.