This budget is a step in the right direction. Maintaining state revenue and expanding investments will be vital in future years.
The FY 2023 budget makes some good and long-awaited investments in Oklahomans. It also misses several critical opportunities to make generational change, such as investing in common education and funding State Question 781.
In late April 2022, state leaders needed only days to fast track $698 million to fund tax breaks to lure an out-of-state company to build a manufacturing facility here. Moving forward, lawmakers should apply the same momentum to restoring decades of cuts, better prioritizing public schools, and providing meaningful support to low- and middle-class Oklahomans.
The FY 2023 budget makes some long-awaited targeted investments, but misses other opportunities to support Oklahomans.
For the fiscal year beginning July 1, 2022 (FY 2023), the Oklahoma state budget is $10.68 billion. This includes appropriations outlined in the general budget bill, plus several other smaller bills that direct funding.
The budget is $1.5 billion (12 percent) less than the FY 2000 budget and $811 million (8 percent) more than the FY 2022 budget, when adjusted for inflation and population growth. (Figures 1, 2)
In addition, the budget adds $214 million in supplemental spending to the current fiscal year (FY 2022), for a total of $9 billion allocated in FY 2022.
Amid temporarily higher-than-usual state revenues, the FY 2023 budget spends more than in FY 2022, but leaves critical investment opportunities on the table.
Though not included in OK Policy’s budget calculations, legislators also directed $930 million of federal funds (provided through the American Rescue Plan Act of 2021) to the Statewide Recovery Fund.
The budget includes two specific revenue allocations for the first time.
Lawmakers directed $698 million (6.5 percent of the budget) to the Large-Scale Economic Activity and Development Fund, to be distributed to large corporations that meet certain requirements for building factories in Oklahoma.
No increased funding for common education is a missed opportunity.
Spending for all education agencies makes up 44 percent of the state budget, or $4.6 billion.
Lawmakers increased the budget for common education by $17 million, or 0.5 percent, for a total of $3.2 billion. Notably, none of this increase will go into the school funding formula; most of the budget increase is directed towards non-classroom needs, such as the State Department of Education and employee benefits. Accounting for inflation and enrollment changes, public education will have eight percent less funding in FY 2023 than in FY 2022, continuing the longtime trend of underfunding public education (Figure 5).
Higher education will see a 7.5 percent increase, or $61 million, some of which will be used for a teacher incentive program. Funding levels remain lower than they were a decade ago, despite the immense impact of higher education on the state economy. This continues the trend of shifting the college cost burden to students and their families.
Health and social services agency funding is largely in line with previous years.
By far the largest budget increase among these agencies is a 43 percent ($37 million) increase to the University Hospitals Authority, though the budget doesn’t detail the purpose for this increase.
The largest agency in this area continues to be the Oklahoma Health Care Authority, with a budget of $1.3 billion. This is six percent, or $68 million, more than the FY 2022 budget.
The budget for the Department of Mental Health will increase by six percent ($18.6 million), with specific investments in children’s mental health, veterans, and individuals residing in county jails. Notably, the budget leaves State Question 781 unfunded.
This budget makes long-awaited investments in Oklahomans with disabilities.
Included in the Department of Human Services’ budget is $32.5 million to address the waiting list for individuals with developmental disabilities by providing new services and directing a 25 percent raise to providers. More than 5,000 Oklahomans have been waiting — some for more than a decade — to access these services, and this investment will improve quality of life for individuals needing services, while also freeing up familial caregivers to seek employment.
Following a reduction in juvenile fees that will be absorbed by the agency, lawmakers budgeted an additional $7 million (7.5 percent) to the Office of Juvenile Affairs. Some of this appropriation will go towards program development, which should help more justice-involved youth reach stability.
Lawmakers prioritized pay increases for law enforcement over other public employees.
The Office of the Attorney General will receive a 46 percent increase ($12 million) for “extraordinary litigation costs.”
Both the District Attorneys Council and the Indigent Defense System will receive 20 percent increases ($12 million and $4 million, respectively).
Targeted investments will improve Oklahomans’ quality of life, but flat budgets will erode services.
Many agencies will receive sizable investments, including:
The Office and Management and Enterprise Services will receive a 43 percent increase over the FY 2022 initial budget ($44 million). Lawmakers stipulated that $36 million of that go towards Service Oklahoma, which has a stated mission of making government services more accessible, starting with the Legislature.
The budget directs an additional $14 million (45 percent increase) to the Department of Agriculture, approximately $11 million of which will fund rural fire assistance.
The Department of Environmental Quality will receive a 125 percent increase, or $11 million.
Other agencies – including the Ethics Commission, the Tax Commission, the Commission on Children and Youth, and the Department of Labor – will have flat budgets or receive increases that are smaller than the current rate of inflation. (Figure 8) As buying power erodes, many agencies will be stretched thinner as they seek to provide essential services to Oklahomans.
Emma Morris joined Oklahoma Policy Institute as the Health Care and Fiscal Policy Analyst in April 2021, and she previously worked as an OK Policy intern and as the Health Care Policy Fellow. She has worked as a case manager with justice-involved individuals and volunteered as a mentor for youth in her community. Emma holds dual bachelor’s degrees in Women’s and Gender Studies and Public and Nonprofit Administration from the University of Oklahoma, and is currently working on a Master of Public Administration degree from OU-Tulsa. She is an alumna of OK Policy’s 2019 Summer Policy Institute and The Mine, a social entrepreneurship fellowship.