Equalization board sets estimate for FY 2025 budget (Capitol Update)

This is the time of year when people who depend on state funding to provide public services start to learn what their funding in the next fiscal year might look like. Public safety, health, social services, education, and general governmental services are all primarily funded by appropriations from the general revenue fund. On Dec. 22, the State Board of Equalization met to estimate the amount of funding that will be available for appropriation in the session beginning in February. 

The board meets every December to make a preliminary estimate of expected state revenue, then again in mid-February while the legislature is in session for the final certification. The board, mainly through the efforts of the Oklahoma Tax Commission, uses an econometric model to predict the revenue that will be received by the state between July 1, 2024, and June 30, 2025. 

The state Constitution allows the legislature to appropriate 95 percent of the amount certified. The remaining 5 percent, if it is received, is deposited in the constitutional reserve or “rainy day” fund to be saved for future needs. If more than the estimate is received it is available for appropriation, usually in the next legislative session. 

The most important number is the amount certified for the general revenue fund from which most appropriations for agency operating budgets are appropriated. The board’s preliminary estimate for the general revenue fund is $8.7 billion for Fiscal Year 2025, which starts on July 1, 2024. This is a healthy increase of about $458 million compared to the current year. Depending on what happens with big policy decisions costing in the tens or hundreds of millions, agencies should be able to look forward to repairing the damage from previous budget cuts, improving their services, or at least shortening their waiting lists for services next year.

Ironically Governor Stitt, who let the general appropriations bill go into effect without his signature last year, is again calling for flat agency budgets and tax cuts. Speaker Charles McCall, R-Atoka, has introduced several tax cut measures which would lower the amount of funds available. So, despite the board estimate, it will likely be a while before state funded service providers know what to expect for the next fiscal year.


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.