Oklahoma’s Constitution requires that the state’s annual budget be balanced.
The balanced budget requirement is accomplished by limiting appropriations for seven funds, of which the General Revenue Fund is by far the largest, to no more than 95 percent of certified revenue estimates for the upcoming year. This allows for a 5 percent cushion in case of a revenue shortfall. If General Revenue collections fall below 95 percent of the certified estimate, the Director of the Office of Management and Enterprise Services declares a revenue failure and reduces funds going to agencies by however much is necessary to bring spending into balance with revenue collections. If General Revenue Fund revenue exceeds the 95 percent level, the 5 percent cushion flows into the Cash Flow Reserve Fund and can be appropriated in the future. If General Revenue collections exceed 100 percent of the certified amount, the surplus flows into the Constitutional Reserve Fund, also known as the Rainy Day Fund.