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

Aanahita Ervin // February 14, 2025 // Updated: February 14, 2025
Media // OK Policy Articles & Research // Press Releases & Statements

The Board of Equalization on Friday certified an $8.273 billion estimate in General Revenue collections for the Legislature to appropriate in Fiscal Year 2026. This is a decrease of $311 million, or about 3.6 percent, from last year’s February estimate, which sets the maximum amount the Legislature can appropriate for the upcoming fiscal year.

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

To reverse Oklahoma’s high poverty rate, low health outcomes, and underperforming school system, lawmakers must allocate our tax dollars responsibly to alleviate these issues. This means direct investment in public services and modernizing tax credits, and not permanent, across-the-board cuts to the state’s income tax. Oklahoma lawmakers are facing difficult choices given limited resources from existing revenue sources.

Notes and background

  • The Board of Equalization meets every February to set the maximum amount the Legislature can appropriate for the upcoming fiscal year.
  • On Friday, February 14, the Board of Equalization certified $8.713 billion estimate in 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 $8.273 billion is available for FY26 legislative appropriations.
  • This is increase of $48 million, or 0.58 percent, since the Board’s revenue estimate in December 2024
  • The increase came from higher income tax and gross production tax revenue collections than were expected in December.
  • Even with this mild increase from the December revenue estimate, the year-to-year decrease shows that lawmakers will have limited dollars this session to allocate to the shared programs and services that can improve our state.
  • February’s estimate follows the Governor’s State of the State address and executive budget earlier this month advocating for a 0.5% cut in individual and the corporate income tax rates, which is estimated to cost the state $660 million annually in recurring revenue. These cuts would be the first step towards his intent to completely eliminate the state’s income taxes. Eliminating the state’s personal income tax would remove $5.4 billion in annual revenue, or about 1 in 3 General Revenue dollars.
  • Additionally, the Governor’s budget called for eliminating the $250 million cap on the Parental Choice Tax Credit (PCTC), otherwise known as the private school tax credit/voucher program.
  • As budget chairs in both chambers have said they want to be fiscally responsible, these estimates should lead them to the conclusion that there are no funds available for permanent tax cuts or an unlimited expansion of the private school tax credit/voucher program.
  • A tight budget means making decisions that are right for Oklahomans, including increased funding for public schools, public safety, health agencies, and more.
  • Legislators can still provide much needed tax relief in a responsible way by supporting the modernization of targeted tax credits already on the books in Oklahoma.
  • Legislators can support the modernization of the Sales Tax Relief Credit. There are bills in each chamber aiming to do just that: House Bill 2228 and Senate Bill 72.
  • 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 within 48 hours or more for lawmakers and the public to review.
  • The February 2025 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.