OK Policy comments on revenue numbers estimated during December’s Board of Equalization meeting

Aanahita Ervin // December 20, 2024 // Updated: December 20, 2024
OK Policy Articles & Research

Statement from Aanahita Ervin, OK Policy’s Fiscal Policy Analyst:

The Board of Equalization on Friday certified an $8.225 billion estimate of funds for the governor’s Fiscal Year 2026 budget proposal. Given this is an early estimate, lawmakers should not view this as a green light to move forward with future revenue cuts in the form of poorly planned tax cuts. Instead, lawmakers should modernize existing tax credits that put money into the pockets of the Oklahomans who need it most, while also protecting vital state revenue. These targeted tax credits are the most fiscally responsible way for lawmakers to deliver tax relief to Oklahomans who need them.

To reverse Oklahoma’s high poverty rate, lawmakers should allocate our tax dollars to help everyday Oklahomans support their families. This includes investments in workforce training, job creation, child care, health care, and many other public services that have been shown to move the needle on poverty. These services remain underfunded in Oklahoma.

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Notes and background

  • The Board of Equalization on Friday certified an estimate of $8.662 billion for General Revenue collections in Fiscal Year 2026, which starts on July 1, 2025.
  • The state Constitution allows the Legislature to appropriate 95 percent of the General Revenue estimate for appropriations for the next fiscal year. This means $8.225 billion is estimated to be available for FY26 Legislative appropriations.
  • This year’s General Revenue estimate is about one percent lower than last year’s December estimate.
  • The December Board of Equalization meeting is among its most watched, because estimates certified in December set the maximum amount of funds that the Governor can use for next year’s proposed budget.
  • The February Board of Equalization meeting is where the estimates determine the maximum amount the Legislature can appropriate for the coming fiscal year. The December and February estimates can be different from each other.
  • The individual income tax has historically been the largest single source of revenue for state services. The corporate income tax is a smaller share of the general revenue due to years’ of cuts, but still an important revenue source. These two income taxes combined represented about 43 percent of the General Revenue collections for the most recently completed fiscal year (FY 2024).
  • Any revenue reduction through income tax cuts would further limit the resources we need to meet the needs of everyday Oklahomans.
  • Tax credits, specifically the Sales Tax Relief Credit (STRC), can provide targeted relief to Oklahomans. Lawmakers should focus on modernizing the STRC this session, which would help put money back in the pockets of more than 500,000 Oklahoma households, including seniors.
  • Additional tax credits that can help everyday Oklahomans include the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).
  • OK Policy encourages the Governor and leaders from the Senate and House to build upon their work last session to make the budget process more transparent. Some improvements include: starting the public budget meetings earlier in the session, making sure there are more voices in the room during those meetings, being consistently transparent throughout the process, and releasing the final budget with 48 hours or more for lawmakers and the public to review.
  • The December 2024 Board of Equalization meeting is available to watch online via Gov. Stitt’s YouTube channel.

 

 

ABOUT THE AUTHOR

Aanahita Ervin // aervin@okpolicy.org

Aanahita Irani Ervin joined OK Policy Institute as a Fiscal Policy Analyst in May 2024. She calls Oklahoma City and Mumbai, India home having been raised in both cities. She earned her undergraduate degree in Chemical Engineering from the University of Oklahoma in 2022 and her Master of Public Policy from the Sanford School at Duke University in 2024. She began her policy journey wanting to merge science with policy to help address climate change. She soon realized her wide array of interests in criminal justice reform to food insecurity and how they are inextricably linked to poverty. Fiscal policy undergirds all policies because without financial backing, policies have no power. Aanahita is excited to use her skills to positively transform Oklahoma’s fiscal policy landscape to better serve everyday Oklahomans. When not working, she enjoys admiring Oklahoma’s sunsets, cooking meals, and taking rejuvenating naps.