FY2024 state budget proposal has promise, but could do more for everyday Oklahomans

Today marks sine die for the Oklahoma Legislature, which normally would be the conclusion date for the regular session’s business. However, this has been one of the most unusual sessions in memory as the legislative process came to a virtual standstill for nearly two weeks while both chambers and the governor held a standoff over an education package centered around private school vouchers.

As a result, the state budget for Fiscal Year 2024 was not publicly introduced until the last week of this legislative session. This left most lawmakers scrambling to review and evaluate the nearly 60 bills that make up its $12.4 billion budget for FY 2024, which starts July 1 — 36 days from today. The budget also includes $590 million in supplemental funding for FY 2023, and many of the budget items include allocation of one-time federal pandemic relief funds from the American Rescue Plan Act (ARPA).

As of this moment, the budget has not been finalized and is still completing its journey through the legislative process. Changes may come based on additional consideration by lawmakers, vetoes by the governor, or potential legislative veto overrides. As a result, it may not be finalized until mid-June. 

One promising note in this year’s budget was the decision to not enact sweeping tax cuts that would have jeopardized state revenue. Most of the major tax cut proposals introduced this session would have delivered the majority of benefits to the wealthy with very little relief to the low- and moderate-income residents. We are grateful those measures weren’t included next year, and this will be something to keep an eye on during future sessions. We also want to thank the hundreds of Oklahoma advocates who contacted their legislators to ask them to protect state revenue this session. We will continue to fight to protect Oklahoma’s revenue base in the years to come.  

A quick view of the proposed budget shows some promise for making investments in our state’s many needs, including: 

• $215 million to help incentivize affordable housing through interest-free loans for more single-family dwellings and gap financing for single- and multi-family units to help address the state’s growing affordable housing crisis.
• $625 million in education investments that include raises for teacher and certified school personnel along with increased funding for the state funding formula. 
• Six weeks of paid maternity leave for teachers and state employees. 
• Approved by voters in 2016 but never funded, lawmakers made a small but overdue appropriation of $12.5 million for mental health and drug use disorder treatments in accordance with State Question 781. This is a good first step, but it does not reflect the full amount of SQ 781’s requirement nor backfills the previous six budget cycles when this was unfunded. Moving forward, lawmakers need to agree on a funding formula that complies with SQ 781. 
• $10 million to the Department of Human Services for reducing the developmentally disabled services waiting list.  
• The creation of a tax credit for low- and middle-income caregivers.   
• The creation of a high-quality legal representation program for children impacted by the child welfare system and their parents, which will be funded at $4.6 million in FY 24.
• A $19 million appropriation to update and modernize the Oklahoma Employment Security Commission’s information technology infrastructure. 
• $200 million in supplemental funding to support struggling hospitals, and $30 million to help providers connect to the health information exchange.
• Budget increases for most state agencies, including the Department of Education, the Regents for Higher Education, the Health Care Authority, the Department of Health, and the Water Resources Board. While many agencies saw budget increases to 2009 levels, they have less buying power today than they did then due to inflation and population growth. 

The biggest miss for this year’s budget process was inclusion of private school vouchers in the form of refundable tax credits paid in advance to families. While it’s good lawmakers capped the program to $155 million (climbing to $255 million for FY 2026), this effort is a wrong turn for public education in Oklahoma.

Lawmakers also missed the opportunity to increase the value of the Sales Tax Relief Credit from $40 to $200 per person. Doing so would have brought meaningful inflation relief to nearly 576,000 Oklahoma households — more than nearly half of which are senior citizens. The value of this tax credit hasn’t been adjusted since its creation in 1990. This would have been the most meaningful, fiscally responsible solution to deliver inflation relief to the Oklahomans who most need it. 

Other budget decisions by lawmakers that don’t serve the needs for everyday Oklahomans include:

• An elimination of the franchise tax, costing about $55 million in state revenue.  
• $145 million to help entice Panasonic to build a manufacturing facility in northeast Oklahoma, bringing taxpayers’ total investment during the past two years to $843 million to support a single economic development effort. 
• The creation of yet another incentive fund, to be known as the Perform Act, funded at $180 million. It is intended to provide large rebates to corporations that meet certain requirements.   
• Salary increases for most statewide elected officials, without comparable increases for public employees.  

In coming legislative sessions, we encourage lawmakers to begin public discussion about the budget well before the final days of session. Leaving this work until the tail end of the session limits discussion on important issues and stifles input from everyday Oklahomans who should have a say in how their state government prioritizes its activities.  

Lawmakers should prioritize the state budget process to make it less rushed and more democratic. They should require that budget bills be introduced at the beginning of session, hold budget hearings, facilitate public comment, require agencies to submit current services budgets  that include ambitious budget requests to address our greatest needs, and more. It is a choice.

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Note (8/2/23): The FY 24 budget was passed as part of a special legislative session, and it was not fully approved until July 31, 2023. While the original budget package included the aforementioned specific funding for SQ 781 and salary increases for statewide elected officials, the ultimate budget package that was passed into law did not include either of those provisions.