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State budget growth nearly $575 million

Gov. Kevin Stitt, right, speaks during a news conference Wednesday at the state Capitol. At left are State Budget Director Mike Mazzei and Shelly Paulk, deputy budget director. The Oklahoma Legislature will have $37.8 million fewer extra dollars to spend than was forecast two months ago. [AP Photo]
Gov. Kevin Stitt, right, speaks during a news conference Wednesday at the state Capitol. At left are State Budget Director Mike Mazzei and Shelly Paulk, deputy budget director. The Oklahoma Legislature will have $37.8 million fewer extra dollars to spend than was forecast two months ago. [AP Photo]

Bolstered by projected revenues from tax increases, state lawmakers should have about $574.5 million more to appropriate this session than they had last year, according to revenue estimates approved Wednesday by the State Board of Equalization.

That's about $37.8 million less than the board projected in December, but the drop was not as large as many government officials were expecting, in light of a dip in oil and natural gas prices.

Gov. Kevin Stitt called the new revenue projections "encouraging," and said it will enable him to push for the budget plan he announced previously, with a few tweaks.

"It just demonstrates that our state's economy is improving," he said. "The job creators are out there making it happen. Oklahomans are working hard. They're opening businesses."

State government is expected to have nearly $8.25 billion available to spend next fiscal year, the new projections show.

Stitt said setting aside more state funds in savings accounts and improving agency accountability continue to be his top priorities, and he made it clear that, to him, that includes changing laws so that agency directors report to him rather than agency boards and commissions.

Of the $574.5 million in new revenue, Stitt said he would like to see:

• $200 million set aside for savings. (That would be in addition to $359.7 million that is projected to go into the state's Rainy Day Fund this fiscal year, which would bring the fund's balance up to $811.3 million.)

• $237 million used to pay obligations like ad valorem tax reimbursements to counties and school districts, medical education programs where money is needed to replace lost federal funds and increased medical insurance payments for teachers.

• $60 million to fund $1,200 pay increases for teachers.

• $77 million for other priorities.

Mike Mazzei, the governor’s secretary of budget, said priorities for that remaining $77 million would include such things as increasing the amount of money available in the governor's quick action closing fund that is used to attract new businesses and creating a grant program that agencies can tap to improve their digital technology and better serve customers.

Persuading state lawmakers to set aside $200 million for savings from the increased revenues this year is likely to be a challenge, with agencies asking for many times that amount for purposes like classroom spending, increased pay for correctional officers, hepatitis C drug treatments for inmates and higher education faculty raises.

House Minority Leader Emily Virgin, D-Norman, said House Democrats want the money to be used to better fund state agencies and services.

"The House Democratic Caucus believes that every dollar of this additional revenue should be put back into agencies that have been raided in the name of high-income tax cuts and corporate greed," Virgin said. "This additional revenue should go toward expanding Medicaid, putting more money into the classroom and ensuring state employees are compensated fairly. This money should go toward restoring the earned income tax credit and creating a more equitable tax system. This revenue should go toward building a better Oklahoma."

Many Republicans in the House are supportive of the governor's desire to put money in savings, although some are suggesting amounts less than $200 million.

"Frankly, given our recent history, I think it would be prudent to set aside at least 10 percent of that surplus to begin building a state savings account," said House Appropriations and Budget Committee Chairman Kevin Wallace, R-Wellston. Ten percent of $574.5 million would be $57.45 million. Wallace echoed Stitt's remarks that much of the extra money is already designated to pay for things like teacher flex benefit increases and ad valorem tax reimbursements to counties and schools.

“If the Legislature passes the $1,200 teacher pay raise, which would cost $70 million, and the $30 million appropriation to the County Roads and Bridges Fund, that will be another $100 million," he said. The rest will be available to help invest in our state agencies, which have already sent us budget increase requests topping $1.2 billion over last year and more than $33 million in supplemental funding requests.”

Donelle Harder, spokeswoman for Stitt, said the governor remains firm in his desire to raise the amount the state has in savings.

“Governor Stitt's top two priorities are agency accountability and building a stronger savings account for the state," she said. "He has set a clear goal for $1 billion in savings by the end of fiscal year 2020, and he said throughout the campaign that the state ultimately needs $2 billion to protect both core services and the Oklahoma taxpayer when our state faces inevitable economic down turns. The governor's focus is on building a stronger savings account and protecting the taxpayer so we do not repeat recent history.”

Randy Ellis

For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two... Read more ›

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