Lawmakers in Oklahoma will have over $500 million less to spend than last year when crafting the upcoming budget, despite an increase in revenue estimates.
OKLAHOMA CITY — Lawmakers will have over $500 million less to spend than last year when crafting the upcoming budget.
While the actual amount available to allocate is $125.2 million more than estimated in December, budget leaders warned that it is short of what’s needed to meet the growing demands for Oklahoma’s “core government services.”
The Legislature is authorized to spend over $12.1 billion for the 2027 fiscal year the Oklahoma Board of Equalization determined Friday. Revenue for the current fiscal year is also estimated to be greater than expected.
State revenue available for appropriation for the upcoming fiscal year is estimated to be $8.2 billion, according to figures provided by the Board of Equalization. This is up $119 million from December’s estimates.
Increases in personal income and sales tax collections drove increases in revenue for the current fiscal year, which are projected to be $459 million more than expected.
Gov. Kevin Stitt, who chairs the board, said the increase in revenue is proof that cutting income tax was beneficial. Last session, lawmakers cut income taxes by .25% with a path to reduce it entirely as state revenue grows. The law took effect Nov. 1.
“The idea is that we have more taxpayers, not more taxes,” he said.
Sen. Chuck Hall, R-Perry, who chairs the Senate Appropriations Committee, said these improvements from December don’t change the reality that this will be a “challenging budget year” with significant education, mental health, Medicaid, food assistance and infrastructure needs.
Around 80% of executive branch agencies have requested budget increases totaling over $1.8 billion, Hall said in a statement.
“These needs come as cash reserves have been somewhat decreased to cover major one-time expenditures last year,” he said. “With $571 million less available to appropriate, it is clear that there will be reduced government spending. Nonetheless, I am confident the Senate will fulfill its constitutional duty and pass a fiscally responsible and balanced budget.”
Stitt said he expects lawmakers will have to dip into the state’s savings when crafting the budget this year.