How Oklahoma filled its budget hole (Capitol Updates)

Photo by Alex Proimos / CC BY-NC 2.0
Photo by Alex Proimos / CC BY-NC 2.0

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

It looked for a while as if legislators would not make their self-imposed early adjournment deadline, but after leaders finally reached a budget deal they suspended the rules to bypass some time limit procedures and adjourned Sine Die on Friday.  Miraculously, after talk all session of draconian cuts in budget priorities, appropriations leaders and their staff dug deeply into the state’s books and found the money to close the budget gap from $611 million to $74 million.  They also found enough to appropriate an additional $48 million in supplemental appropriations for this year’s budget.

The big ticket items that allowed them to get this done were $150 million from the Rainy Day Fund (they could have taken $191 million), $121 million from the cash flow reserve fund, $50 million from the unclaimed property fund and $125 million from various revolving funds.  The cash flow reserve fund contains revenue that came in above 100% of the revenue estimate in the previous fiscal year.  Both the Rainy Day Fund and the Cash Flow Reserve fund exist because of Oklahoma’s conservative method of certifying funds available for appropriations passed by constitutional amendment in 1985.    

The agency revolving funds that took the biggest hits were $10 million from the Department of Environmental Quality, $17.5 million from the Oklahoma Department of Transportation weigh station revolving fund, $6 million from the Insurance Department, $5 million from Tourism, $10 million from the Supreme Court IT revolving fund, $5 million from the Oklahoma Tax Commission Computer revolving fund, and $25 million from an Oklahoma Healthcare Authority revolving fund.  Quite a few other agencies lost revolving funds in the millions.

Most of these revolving funds exist because funds were either “saved” or generated within the agencies for use for long-term maintenance and improvement needs.  When those revolving funds are moved to the general fund for current operations the agencies defer maintenance and improvements.  The legislature chose to defer maintenance and improvements to some future date, which is a rational thing to do, but it can only go on for so long.  At some point, Oklahoma will begin looking like a third world state.  Despite painful cuts to many agencies, the legislative leadership, the appropriations chairmen and subcommittee chairmen and the members who voted for the budget bills did a great job of keeping the ship of state afloat, given the hand they were dealt.  We should thank them for their hard work.  But one has to wonder what the ultimate cost of such tight budgeting will be down the line.


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.

2 thoughts on “How Oklahoma filled its budget hole (Capitol Updates)

  1. Tax cuts for the upper income Oklahomans were more essential than maintenance of capital assets? How does that logic work?

  2. I like the line “given the hand they were dealt”. The hand they were dealt is from their own doing – tax cut, tax cut, tax cut. Since at least 2005, that number is around $1 Billion. Oil and natural gas do not forever stay high. There would be no problem this year or next year if the legislature and governor would quit trying to have something for nothing! We don’t need bridges, roads, schools or anything else – other than prisons. This year’s tax cut will not buy one family’s lunch…that’s one out of 365 days! I know that money is going to spur the economy so that jobs will be created so all sorts of new tax money will flood our stay to pay for the things that are needed. Talk about foolishness! Well, in just a few months when you will need a passport to fly out of Oklahoma, we will be well on our way to being a 3rd world country. The last one out, please turn out the lights – on the other hand, that won’t be necessary because the electric company will have already cut the power due to the state not paying the light bill. Isn’t it great to live in OK!

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