Budget bills address economic development, disability waiting list, but miss the mark on education (Capitol Update)

Flush with cash due to federal pandemic funding and a booming energy economy, the legislature last week had to determine the most responsible way forward. A few quick observations are possible.

First, legislators chose to park just under $1 billion in funds to promote economic development. $698 million was appropriated last week for the Large Scale Economic Activity and Development (LEAD) Fund created last month in House Bill 4455. Reportedly, Oklahoma is in competition with Kansas for a large battery manufacturing plant said to be locating at the MidAmerica Industrial Park in Pryor. If the state is successful, the company would spend $3.6 billion to build a huge facility — 80 acres under roof — and employ no less than 4,000 people over a five-year period.

If the facility comes to Oklahoma, the state will rebate to the company 3.4 percent of its capital expenditure each year for five years, so long as the company stays eligible, for a total of about a 17 percent rebate. The establishment would have to spend no less than 20 percent of the total capital expenditure before becoming eligible for the first year’s rebate. Total rebate would look to be over $600 million. There are other incentives included in the overall offer.

In addition to the LEAD fund, legislators appropriated $250 million to a newly created fund called the “Progressing Rural Economic Prosperity Fund,” or PREP Fund. Although HB 4456 that creates the fund doesn’t say so, apparently the idea is to make funding available to develop other industrial parks like MidAmerica in other rural parts of the state to take advantage of future opportunities like the potential battery manufacturing facility.

Legislators also appropriated $181 million in HB 4474, ostensibly to give taxpayers inflation relief. With a huge, if temporary, budget surplus, there was pressure to pass major tax cuts, but the legislature wisely chose to give a one-time tax rebate instead, demonstrating their understanding that the money belongs to taxpayers, and they are not spending lavishly. In addition, they reinstated the motor vehicle sales tax exemption at a cost of about $165.5 million. 

The biggest loser in the budget was common education, which I would argue was a mistake. It seems like there is enough cushion in the fiscal condition of the state to begin moving it out of the bottom tier in education funding. Absent substantial education increases this year, legislators are creating problems for the next few years when the state will have to play catch up without making long-term gains.

Easily the biggest budget winner was the $32.5 million appropriation to the Department of Human Services to eliminate the 13-year long waiting list for assistance for people with intellectual or developmental disabilities. This is the culmination of several years of work to evaluate the waiting list and get help to this truly vulnerable population. Sen. Paul Rosino, President Pro Tempore Greg Treat, and Sen. Frank Simpson have doggedly pursued this goal in the past few years and were able to get it done this year. It was an emotional and memorable moment when the bill passed.   

In an election year, the legislature this year pretty much had the ability to pass whatever kind of budget it wanted, no excuses. Legislators chose opportunity funding for economic development, taking care of one cohort of the truly vulnerable, parking money for future use, and rebates rather than major tax cuts. Other than the missed opportunity for education funding, it’s hard to quarrel with their choices. Hopefully, the economy will continue moving upward, creating similar opportunities next year. After years of underfunding for our state government, it’s nice to see progress.     


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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.