Lawmakers have about $120 million less than what they had last year for the total state budget allocation and about $1 billion less than what state agencies are asking for heading into the new fiscal year, which starts in July.
The Oklahoma Board of Equalization authorized a state budget of $12.36 billion last week. The action is a launching point for the legislature and governor to negotiate a final state budget before the legislative session ends.
For Gov. Kevin Stitt, that means cutting the personal and corporate income taxes and keeping state budgets as flat as possible. And while House Speaker Kyle Hilbert and Senate Pro Tem Lonnie Paxton have agreed with Stitt in principle on lowering taxes, they have yet to commit to approving any of the proposals filed this session.
Stitt has some leverage to make the case for such a cut, though. State Treasurer Todd Russ, who sits on the board, said sales tax revenues are doing better than expected.
“After the sales tax reports from the grocery tax, we dropped off, I think I'm guessing $160 million or something like that. Estimated about three,” Russ said.
“The next month we saw that come back up and we were almost right the range that we'd started out at,” he said.
Russ says income tax and natural gas production revenues are also up. He says calculating the estimated state budget allocations year-over-year hides Oklahoma's steady growth in revenue. A five-year average, as is used to calculate other parts of the budget, is more telling, Russ said.
The day before the budget numbers were released, Paxton said the estimates were pleasing so far but remained conservative until the official numbers came out.
“If we continue meeting the estimates that we're doing right now for this budget year, for this fiscal year, then there may be another $ 300, $350 million to put into savings,” Paxton said at his weekly press conference. “But that's not something that the legislature is going to appropriate.”
The BOE estimates $4.6 billion in reserves and unspent revenues from fiscal year 2025.
