OKPOLICY.ORG
The legislature, after the February meeting of the State Board of Equalization, has a whopping $967 million in recurring revenue available this session to appropriate for state services for Fiscal Year 2024, which begins July 1, 2023. Recurring revenue means those dollars, if spent, can be expected to be replaced in the same amount by new revenue in the following years if economic conditions remain relatively stable and there are no tax cuts. In addition, the state has about $1.1 billion in “one-time” funding available that could be spent for expenditures such as capital projects or other investments that would not be recurring.
But hold on. Gov. Kevin Stitt has proposed annual tax cuts of $963 million: Elimination of the state sales tax on groceries which would reduce appropriations by an estimated $351 million; a 76 percent reduction in the personal income tax rate that would cost $520 million per year; and a 75 percent cut to the corporate income tax rate which would decrease collections about $92 million over a full year. The income tax cuts would likely be in effect for only half the first year. So, if all the Stitt tax cuts were passed, available appropriations for Fiscal Year 2024 would be decreased by about $657 million, and the Fiscal Year 2025 appropriations would be cut another $306 million when the second half of the income tax cuts would be felt.
Contrast that with the House and Senate proposals for common education alone. House Speaker Charles McCall, R-Atoka, has proposed an $800 million package: $300 million in refundable tax credits for the parents of children attending private schools and homeschoolers, plus a $500 million appropriation to be distributed to schools outside the state aid formula with limitations on the larger metro school districts. The tax credit would amount to $5,000 per student attending private schools and $2,500 per student being schooled at home. “Refundable” means the parents would get the money in a payment from the state even if they do not earn enough to take advantage of the tax credit. Alternatively, the Senate has proposed a $541 million education plan in the form of several bills advanced by Sen. Adam Pugh, R-Edmond, Chair of the Senate Education and Education Appropriations Committees.
Senate Appropriations Chairman Roger Thompson, R-Okemah, has stated the obvious, that the tax cut and education proposals would leave little to meet other needs of the state. In my world, it would be wonderful if legislators could invest the available $967 million recurring funding to move our state up the scale on such things as education, higher education, public and mental health, economic development, and public safety. But that’s not the political climate we live in today. I’ve lived in Oklahoma when there were outcries for tax relief. Nothing like that is coming from the public today, but we’re likely to get it anyway.
