OKPOLICY.ORG
As NonDoc’s Tres Savage recently put it, “How does one describe covering regular sessions of the Oklahoma Legislature to a newcomer on the scene? Well, imagine knowing you will end up in a bus wreck every May.”
This colorful analogy is accurate. I’ve seen 12 Oklahoma legislative sessions, and I am at this point pretty well accustomed to the mounting drama at 23rd and Lincoln as sine die draws near. However, this spring has been even wilder than usual. Topped off by Wednesday’s surprise announcement that the governor and legislative leaders had, behind closed doors, struck a deal with both an immediate tax cut and a triggered tax cut. Taken together, the budget deal would cost up to $400 million annually.
We can’t know what negotiations entailed. But from the outside, it’s a rough moment to be cutting revenues.
First, there’s the state Department of Mental Health and Substance Abuse Services. In the last month, ODMHSAS first reported it had a $63 million shortfall. That number was then revised downward to a $23 million shortfall – but ODMHSAS said it only needed $6 million to cover the gap. Legislators were unimpressed by agency leadership’s inability to answer basic questions about agency finances. That was before someone at ODMHSAS realized midway through the week that ODMHSAS might not be able to make the next week’s payroll – but then revised that catastrophe a few weeks to the end of May. Now providers claim the agency owes north of $150 million in unpaid provider payments. We can only wait to see how many other rabbits jump out of the hat.
Then, lawmakers recently heard from the state Department of Corrections, which oversees the rehabilitation and well-being of 23,000 or so Oklahomans within its facilities. Corrections officials have proposed spending $312 million to buy a private prison near Lawton. Some lawmakers are encouraging Gov. Stitt to declare an emergency so that Rainy Day Fund monies can be used towards the purchase. (That this runs counter to longtime legislative and voter-approved efforts to reduce Oklahoma’s prison population and invest in community-based services instead appears not to have entered the chat. Such is the nature of an emergency: there’s not a lot of time for deliberation.)
Neither a multipart agency shortfall nor purchasing a prison was on anyone’s laundry list of spending expectations going into the current legislative session.
At the same time, chaos at the federal level is creating enormous unknowns that will likely compound unexpected state expenditures. Congress has committed to cutting billions of dollars in food and medical assistance sometime next year, as part of passing a “big, beautiful bill” funding tax cuts for the wealthiest Americans.
Oklahoma almost certainly will not – cannot – make up the SoonerCare (Medicaid) funding shortfalls Congress is threatening. Although Medicaid expansion has attracted the majority of attention, the dollar amounts Congress has pledged to cut would likely ripple far beyond the working-age adults Medicaid expansion covers. Children, people with disabilities, and low-income retirees would also see services reduced, eligibility altered, and/or providers abandoning the program. That’s without going into the fallout from proposed cuts to health insurance premium subsidies, which would leave thousands of Oklahomans unable to see a doctor or fill a prescription. Even worse, the massive cuts to federal food assistance Congress is contemplating would worsen food insecurity when 1 in 4 Oklahoma children already don’t get the food they need.
Federal activity also threatens Tribal Nations across the state. President Trump’s proposed budget would gut funding for Tribal health care, education, and public safety – dollars that are legally mandated obligations under government-to-government treaties. The fallout won’t be limited to Tribal governments, infrastructure, and lands. Tribal Nations are among the largest employers and investors in the state, funding hospitals, supporting schools, and building infrastructure that benefits all Oklahomans. Cutting federal funding to Tribes in the middle of a state and federal fiscal storm wouldn’t just be a breach of trust – it would be a blow to communities that rely on that investment every day.
Given all of the above…it would seem to be a bad time to probably permanently reduce the amount of money the state has to fund basic services.
Oklahoma’s revenue is volatile at the best of times. These are not the best of times.
Gov. Stitt has spoken many, many times about the need to “run government like a business,” as the Tulsa World’s Ginnie Graham recently highlighted; indeed, he ran on it. No serious business would voluntarily cut incoming revenues in the face of such rampant uncertainty.
It’s a bad time for a tax cut.
