Governor issues executive order to change workforce development responsibilities (Capitol Update)

Gov. Kevin Stitt filed an interesting executive order last week transferring the Oklahoma Office of Workforce Development from the Department of Commerce to the Oklahoma Employment Security (OESC) Commission and giving OESC control over all money received by the state through the federal Workforce Innovation and Opportunity Act (WIOA).

According to the order, “the current structure of Oklahoma’s workforce delivery system suffers from a fragmentation of responsibilities and funding between several state agencies, including but not limited to, the Department of Commerce, the Department of Rehabilitation Services, the Oklahoma Employment Security Commission, the State Regents for Higher Education and associated institutions of higher education, the State Department of Career and Technology Education, and the State Department of Education, as well as further fragmentation due to the involvement of various local governmental entities.”

The thing that makes this interesting is that it is being done by executive order rather than by legislation. Traditionally, state agencies are created and given their duties through acts passed by the legislature and signed by the governor. The Oklahoma Employment Security Act was originally enacted as the Oklahoma Unemployment Compensation Law by the legislature in 1936. It was amended in 1941, changing the name to the Oklahoma Employment Security Act and removing the administration of the Act from the Commissioner of Labor to the Oklahoma Employment Security Commission. The Act has been amended numerous times since the Commission was created.

Conversely, in Oklahoma federal funds such as those received through the WIOA have traditionally flowed to the state and been allocated at the discretion of the governor with little oversight by the legislature. That has changed some recently. In 2021 the legislature passed House Bill 2932 after expressing concern about Stitt’s office directing how the state would spend $1.26 billion in federal CARES funding. 

HB 2932 found that the CARES Act did not allow for direct participation by the legislature and that the legislative advisory group formed in May 2020 did not provide a method to analyze whether the expenditures complied with the CARES Act requirements or to prevent such expenditures from causing increases in executive agency budgets in the future.

In HB 2932, legislators limited the governor’s authority to spend the remaining CARES funding by providing that unless expressly authorized by the legislature, no agency within the executive branch shall utilize federal funds from the CARES Act, or any federal funds allocated to Oklahoma by act of Congress after December 1, 2020, in a manner that will, or that will be likely to increase the demand for state funds. 

Subsequently, some of the CARES funding allocated by the governor has become the subject of unfavorable state and federal audits and investigations.

After Congress passed the American Rescue Plan Act (ARPA), legislators in 2022 enacted HB 3349 removing the governor’s authority to spend $1.9 billion in ARPA funds, along with the remaining CARES Act funds, and joined most states by allocating the ARPA funds through the legislative appropriations process. 

This year, the relationship between the executive and legislative branches has come into further conflict with Governor Stitt suing Senate President Pro Tempore Greg Treat, R-Oklahoma City, and Speaker Charles McCall, R-Atoka, to invalidate acts (and vetoes) of the legislature passed during the recent special session.

Centralizing the administration of WIOA activities and WIOA funding might be a great idea. But one must wonder if making significant changes in agency functions and allocation of funding without legislative input will invite more scrutiny and perhaps more conflict. There’s an argument to be made that all federal funds should go through the legislative appropriations process so they can be better coordinated with state funding. 

It’s a lot easier to simply issue an executive order, but it might have been better in the long run for the governor to propose legislation and accomplish the changes he wants though the legislative process. Or then again, perhaps it won’t matter one way or the other. 


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.

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