Leadership requires courage to make a better future for Oklahoma (Capitol Update) 

Former House Speaker Glen Johnson used to joke about going to visit a House member who was in the hospital. He told the sick legislator that the House had voted to send best wishes for a speedy and complete recovery — by a vote of 51 to 50. The story reminds me of the June 30 vote to expand Medicaid in Oklahoma. After monumental efforts by Oklahoma’s medical community and a variety of organizations and citizens, Medicaid expansion passed by a vote of 50.4 percent. But it did pass, and legislative leaders have committed to fund the state match for the health care program. The cost is predicted at about $100 to $150 million to match the federal funding of about $1 billion.

The Glen Johnson story came to mind while reading an excellent article by Paul Shinn of the Oklahoma Policy Institute about last week’s Equalization Board certification of available funding for the upcoming session. In discussing the state’s long-term structural revenue deficit, Shinn urged the wisdom of fully funding Medicaid expansion as well as other measures. Medicaid expansion is forecast to add 29,000 jobs and about $125 million in new tax revenue to the state budget, nearly offsetting what will be the Legislature’s original investment. To say nothing of the added health and mental health benefits to Oklahoma’s citizens.

The $150 million Medicaid investment should not pose a huge problem. The Equalization Board certified approximately $8.5 billion available for expenditure next session, an increase of about 8.1 percent or $671 million. That would ordinarily be great news, but there is a catch. Not all of the $8.5 billion in the FY 2022 appropriations authority represents recurring revenue. If you remove one-time money, recurring revenue in the FY 2022 appropriations authority is only $7.4 billion, $400 million less than this year’s appropriations. This would normally add to the state’s miseries with more budget cutting next year. 

The reason that is not happening is that last year the Legislature effectively made a two-year budget plan to work its way through the pandemic. It cut expenditures well below last year’s certification (before the pandemic) and provided borrowing authority to replace money to be taken from revenue earmarked for roads and retirement systems. These actions, together with the better-than-expected economy, left one-time money on the table for next year.

But look for the appropriators to be cautious next year in spending the one-time money. After the Medicaid expansion funding, the state’s pent-up needs add up quickly. And the more legislators spend of the one-time money, the more likely they may be creating a budget hole for FY 2023. The Legislature is due tremendous credit for managing the fiscal crisis caused by the Coronavirus pandemic over a two- and possibly three-year period.

In his article, Shinn calls for leadership in creating a positive future for the state, which is not always the same thing as managing a crisis. No doubt, leadership is difficult in an environment where something as positive and necessary as Medicaid expansion passes a vote of the people by a 50.4 percent vote. It takes courage to stick your neck out when, as in former Speaker Johnson’s story, the vote is 51-50. But waiting until nearly everyone agrees is not leadership. It’s a formula for a last-place state.