OKPOLICY.ORG
The legislative session began last week with Gov. Stitt’s State of the State address and the unveiling of his executive budget. The speech didn’t seem much different than his previous efforts with the governor claiming “a mandate to support and pass conservative, limited government legislation that makes the American Dream possible for all four million Oklahomans.”
His formula for success is four principles he says Oklahomans voted for: 1) protect Oklahoma taxpayers; 2) be the best state for business; 3) safeguard our savings; and 4) protect the Oklahoma way of life.
He summed up early his previous six years, saying that “we said no to good ideas in the moment so we could say yes to the well-being of future generations of Oklahomans. Because of that discipline, we got to come together as Republicans and Democrats to say yes to cutting the grocery tax last year.” Paraphrased, he says: “Say no to good ideas now so we can say yes to cutting taxes later.”
The governor announced he is launching DOGE-OK (Department of Government Efficiency – Oklahoma) to keep the focus on flat budgets and limited government. He said that for years, he has instructed his cabinet secretaries and agency directors to shrink employee count and cut unnecessary contracts. He said he is committed to having fewer state employees at the end of his term than when he took office in 2019.
The only exception to his “no good ideas” approach was his own idea for a $2 million appropriation to create business courts to make sure business disputes and complicated contracts will be handled by judges with business expertise. He said, “It’s policies like this that make our state something to brag about.”
Despite last year’s repeal of the sales tax on groceries and additional spending for private schools that triggered the revenue shortfall this year, the governor recommended a personal and corporate income tax cut that when fully implemented will reduce state revenue by approximately $500 million. He also championed removing the $250 million cap on spending for private schools.
At the same time, he said he wants to set a savings floor of $4 billion dollars to ensure the state can weather any financial storm in the future. No one would argue against a reasonable, even a generous reserve account as insurance against future downturns. But one must wonder why, at the expense of public school teacher raises, expanded mental health, addiction and health programs, adequate law enforcement and prosecution funding, and first-class higher education, the state needs to have a $4 billion carryover.
The answer lies, at least partially, in the governor’s budget document. The governor’s Fiscal Year 2026 budget introduces an idea called Revenue Stabilization 2.0. The Revenue Stabilization Fund is a reserve fund established by the legislature in 2016. It accumulates when oil and gas production revenue is high, and the funds are available for appropriation during economic downturns.
The governor proposes using only the earnings of this fund to stabilize the budget, rather than the accumulated funds. He says in 20 years, the earnings will be enough to replace the oil and gas tax revenue and, in addition, to support his goal of eliminating income taxes. So, there we have it: The next version of “say no to good ideas now so we can say yes to cutting taxes later.”
This extreme adherence to flat budgets and tax cuts in the face of pressing state needs has essentially opted the governor out of the budget process for five of the last six years. Legislators, who spend months reviewing budget figures, considering the needs of executive agencies, and hearing from those providing or receiving education and governmental services, have either overridden his budget vetoes or made an eleventh-hour deal to obtain his approval.
It remains to be seen how the new legislative leadership and members will react as the legislative session progresses.
