Legislature to address upcoming budget issues (Capitol Update)

The Legislature’s action during Monday’s special session will be aimed at approving the expanded health emergency declared by Gov. Stitt and dealing with the budget issues created by the economic crisis resulting from the COVID-19 pandemic. State law requires the Governor to call a special session for the legislature to affirm or deny the expanded emergency. Concerning the state budget, it appears there will be a $416 million revenue failure for the remainder of this fiscal year ending June 30. This will result in across-the-board cuts of 6.2 percent unless the legislature backfills the FY 2020 appropriations.

Fortunately, the state had a couple of decent years of revenue since the last recession that caused the Rainy Day Fund to automatically fill to about $806 million. A portion of that money will be used to fill the budget gap and avoid cuts between now and June 30. The Legislature will also appropriate some Rainy Day Fund money to the Revenue Stabilization Fund, adding to the $200 million added last year to deal with any further revenue failure that could occur before June 30. 

If things don’t get too much worse, the situation may be not quite as dire going forward as it first appears. About half of the $416 million shortfall is caused by the delay in the filing deadline for income taxes from April 15 to July 15 that was adopted for both federal and state income taxes. That $200 million, give or take, in state personal and corporate income taxes will come in late and be available to help cushion the FY 2021 budget beginning July 1.

Hopefully, unless the entire economy craters, this will help “flatten the cure” for the state budget and allow for at least a level FY 2021 and FY 2022. This is a far cry from the progress many were looking forward to last February on some of Oklahoma’s entrenched social and economic challenges, but it is better than it could be. 

There will also be federal funding available to the state for health care-related expenses due to the coronavirus pandemic, some of which will be made available through an increase in federal FMAP (Federal Medical Assistance Percentages) in Medicaid and other types of funding. It would seem that if the federal Centers for Medicare and Medicaid Services approves the Governor’s request for full Medicaid expansion beginning July 1, this help could be available for many more Oklahomans.


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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.