Last week, the Oklahoma State Board of Equalization held its first meeting for the purpose of certifying how much money the legislature will have to appropriate for the budget year beginning July 1, 2020, when it convenes in February. The current economy on the current tax rates has produced what amounts to a level budget going forward next year. The net increase available is $9.1 million, or an increase of 1.1 percent. But with state finance it is never that simple.
Last year at Gov. Stitt’s insistence, legislators appropriated $200 million to an account called the “Revenue Stabilization Fund.” This cash was stashed away in addition to the “Rainy Day Fund” deposit of $359.7 million, which now has an $806 million balance. The state constitution requires that each year revenue received above the equalization board certification is to be deposited into the Rainy Day Fund. But the new governor wanted an additional savings deposit, so legislators agreed to deposit $200 million into the Revenue Stabilization Fund that was created in 2016. When it was created, that fund’s purpose was to save a small portion of the gross production tax and the corporate income tax revenue because of the volatility of those revenue streams.
Presumably in a flat revenue year, rather than tucking away another $200 million in the revenue stabilization fund, that money will be on the table for appropriators to meet the needs of state government. In addition, according to Stitt and Senate Appropriations Chairman Roger Thompson, there is about $250 million in “one-time” money that was appropriated last year to agencies on a one-time basis. This year, that $250 million will also be available for appropriation for different purposes.
So, although this year’s certified revenue measured against last year’s appropriations is flat (plus $9.1 million) there is at least an additional $450 million available for appropriations to education and state agencies to meet state needs without touching any of the state’s savings. Sen. Thompson was quick to point out, however, that there already exists about $200 million in obligations above last year’s expenditures, so part of that $450 million may already be spoken for.
It’s worth remembering that the December certification is only a preliminary estimate. The final certification will occur in February after the legislature is in session. The picture could be a little better or a little worse. The message is, however, that for those depending on state appropriations to provide state services there is room for some progress.