FY 2020 Budget Highlights

[Download this report as a pdf.]

The FY 2020 budget increases funding significantly.

  • State agencies will be appropriated a total of $7.999 billion in FY 2020. This is an increase of $431.7 million (5.7 percent) compared to the initial FY 2019 budget approved last May and $1.033 billion (14.9 percent) above FY 2018.
  • Without accounting for inflation, next year’s appropriations will be the largest in state history, surpassing the $7.567 billion budget in FY 2019.
  • When adjusted for inflation, next year’s budget remains 10.2 percent ($906 million) below the budget of FY 2009 and 14.9 percent ($1.398 billion) less than the peak year of FY 2007.

There are no major tax policy changes.

  • New or expanded tax breaks were passed for the Film Enhancement Rebate Program, software or cybersecurity employees, sales of prosthetic devices, rural physicians, first-time home-buyers and large entertainment districts. These tax breaks have a combined revenue impact of less than $10 million in FY 2020, although the cost will grow in future years.

The largest funding increase goes to the Department of Education.

  • Total appropriation for K-12 education is increased $158 million (5.4 percent) from initial FY 2019 funding.
  • Common education receives increases of $58 million for teacher pay raises averaging $1,200 per year; $19 million for increased benefit costs; $5 million for the Reading Sufficiency Act; and $74 million through the school funding formula for general operations.
  • State support for school operations — excluding money for mandated pay raises — will remain some $103 million less than its peak in FY 2008, even as K-12 enrollment has grown by over 50,000 students.

Several other agencies receive funding increases, including:

  • The Department of Mental Health and Substance Abuse Services (ODMHSAS), Oklahoma Health Care Authority (OHCA), and Department of Human Services (DHS) are funded to increase most provider rates by 5 percent;
  • The Office of Management and Enterprise Services receives a $49.9 million increase for information services, accounting and asset management, Governor’s Mansion repairs, and increased bond payments. 
  • The Department of Corrections receives $38.3 million for a $2.00 per hour pay raise for employees in correctional facilities, Hepatitis C remediation, and county inmate transport.
  • The Regents for Higher Education receives $25.3 million for a 3.5 percent increase in faculty salary, concurrent enrollment programs, and deferred maintenance. 
  • Budgets are increased for the Governor, House of Representatives, Senate, and Legislative Service Bureau by $13.4 million (34.1 percent).
  • State workers receive raises ranging from a maximum of $1,500 for employees with salaries under $40,000 to a minimum of $600 for those with salaries over $60,000. The Legislature appropriated $37.7 million to cover pay raises.
  • While most agencies receive an increase for FY 2020, 39 agencies (60 percent) have lower budgets than in 2009.

The budget sets aside funds to cushion future revenue losses.

  • The budget sets aside $200 million for the Revenue Stabilization Fund to be available when volatile revenue sources fall and also saves $29 million of increased federal Medicaid funds to maintain provider rates if federal funding declines in the future. 
  • The Rainy Day Fund is set to receive an automatic deposit of over $400 million at the end of the current fiscal year due to revenue collections exceeding estimates, which will bring the Fund to close to $900 million, its largest balance ever.

Visit our interactive table to see the full appropriations history for each state agency from FY 2009 to FY 2020.

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ABOUT THE AUTHOR

Paul Shinn

Paul Shinn is a Budget and Tax Senior Policy Analyst with OK Policy. Shinn has held budget and finance positions for the Oklahoma House of Representatives, the Department of Human Services, the cities of Oklahoma City and Del City and several local governments in his native Oregon. He's also taught political science and public administration at the University of Oklahoma, University of Central Oklahoma, and California State University Stanislaus. While with the Government Finance Officers Association, Paul worked on consulting and research projects for the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and several state agencies and local governments. He also served as policy analyst for CAP Tulsa. He holds a Ph.D. in Political Science from University of Oklahoma and degrees from the University of Oregon and the University of Maryland College Park. He lives in Oklahoma City with his wife Carmelita.

4 thoughts on “FY 2020 Budget Highlights

  1. What does “Budgets are increased for the Governor, House of Representatives, Senate, and Legislative Service Bureau by $13.4 million (34.1 percent).” entail? The percentage seems high in the view of all the other allocations. It really popped out when I saw it.

    1. Thanks for your question, Becky. One specific item listed in the supporting documents for the budget was $1.7 million to Legislative Service Bureau for the new Office of Legislative Fiscal Transparency. which will analyze agency budget requests and conduct performance evaluations of agencies. The House of Representatives received $6.9 million and the Senate $2 million. The difference was to provide “parity” among House and Senate operations and staffing. Finally, the Governor received $2 million. Governor Stitt explained that cabinet secretaries and other staff in his office had been unpaid or paid through agency budgets under former Governor Fallin.

  2. Where is the legislation that created the “Rate Preservation Fund”? Is it something related to Medicare funding? I Googled the topic and the Revenue Stabilization Fund was all that came up.

    1. Hi Bart

      Here’s the link to the legislation that created the Rate Preservation Fund. The concept is to us some of the state budget freed up by the increased federal matching rate for Medicaid. It would be used to mitigate or prevent provider rate cuts when the federal matching rate falls.

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