Big ticket tax cuts could prevent strategic investments in Oklahoma’s future (Capitol Update)

Big ticket outcomes for the upcoming legislative session have yet to come into focus. Big ticket items could include passage of one or more of the various tax cut proposals being discussed or appropriations that affect budgets across state government. For example, Sen. Roger Thompson, R-Okemah, has prefiled Senate Bill 1292 to provide a long overdue pay increase for state employees. The bill provides for a 9 percent increase estimated to cost about $173 million.   

Of course, it takes both legislative chambers and ideally the governor to accomplish anything. The governor has been predictable as he continues his mantra of flat budgets and tax cuts. When he came into office in 2019, Gov. Stitt was fortunate to have missed the previous economic downturns during the great recession that began in 2009 and continued during Gov. Fallin’s second term. 

For years, legislators had cobbled together appropriations by enacting severe agency budget cuts and draining available cash funds. The governor also missed the turmoil of the teacher walkout and the tax increase in 2018, signed by Gov. Fallin while Stitt was campaigning for office, that funded a teacher pay raise and set the stage for a more stable state budget. 

As the recovery began during Gov. Stitt’s first year in office, he urged the legislature to establish another savings account in addition to the Constitutional Reserve Fund, to be better prepared for Oklahoma’s up-and-down energy-dominated economy. When the pandemic hit in 2020, the state was the beneficiary of federal pandemic funding poured into the states specifically for the purpose of protecting state budgets from economic disaster. 

A combination of federal funding, a positive economy, and appropriating less than was available for state operating budgets has produced large cash reserves sitting in accounts. Some are designated for future economic development opportunities. But instead of taking the rare opportunity for the state to make progress in education, higher education, healthcare, and workforce development, the governor seems stuck on his 2019 mantra. 

Mostly the governor has opted out of the budget process, either vetoing budget bills or simply letting state budgets go into effect without his signature. The unanswered question is the House and Senate’s view on the big ticket items. The House has generally been willing to go along with Gov. Stitt’s tax cuts. Several tax cut proposals have been prefiled in both the House and the Senate. Outcomes on these will affect possibilities on appropriations and the state budget.


Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.