Executive Summary

Here’s a summary of the contents and the themes of each of the Guide’s five sections. You can click on the section names to navigate to that section.

Expenditures explores how we use public money to meet our goals as a state. This section compares Oklahoma’s spending patterns to those of other states. It describes the major functions of state and local government, the services these governments provide, and indicators of how we are doing.

The most important themes from this section are:

• Government spends money to purchase goods and services for improving the community. Whether spent on teacher salaries, building roads, or maintaining parks, these resources are intended to support a quality of life that promotes prosperity and benefits families, businesses, and communities.
• Oklahoma governments spend well below the national average per person: $8,373 in 2013, compared to  $10,116 nationwide. Oklahoma state and local governments spend much less than the national average for all government services except transportation.
• Public investment over the years has made Oklahoma a vibrant state and a great place to live.  Without the revenues residents contribute to the public good, there would not have been universal public education, affordable public colleges, public parks and libraries, state-of-the-art highways, ports, and airports.  There is much more to be done though, to help make sure everyone has the opportunity to prosper, and to preserve the gains made over decades.

Revenues takes us through the sources of public money. A detailed tax section describes the nine major taxes, looking at how they are calculated, how they are divided up among various uses, the revenue they generate, and how our tax levels compare nationally and have changed over time. This section also describes the major other revenues – including federal funds, user charges, utilities, and insurance trusts – that makes public services possible.

The major themes of the revenue section are:

• Oklahoma governments rely on many revenue types to fund essential government services. While taxes are the most visible and largest revenue source, they represent less than half of all revenue.
• Oklahoma taxes are among the lowest in the nation. The gap between Oklahoma tax revenue and the national average has grown over the last decade.
• Over time, Oklahoma has increased its reliance on the sales tax and individual income tax, which are the two largest tax sources.
• User charges and federal funds provide significant revenues for public services, particularly for health and social services, education, and transportation.

Budget Process presents information on the legal structures and informal practices that govern Oklahoma state budgeting. It walks through the budget process in a step-by-step format.

The key themes of this section are:

• Oklahoma’s budget is the product of legal, political, and practical limitations that require significant effort every year in trying to meet the needs of all participants and to use public money wisely and effectively.
• Oklahoma’s budget must be completed within constitutional and legal limits that attempt to prevent spending beyond the available resources, restrict certain revenue streams only for specific agencies and purposes, set aside money for future emergencies and economic downturns, and maintain accountability to taxpayers.
• The annual budget process takes more than two years from the planning stages through audit and evaluation. The key steps are agency budget requests, revenue certification by the Board of Equalization, the Governor’s proposed executive budget, legislative deliberations and appropriation, implementation, and audit and evaluation.
• Numerous state and federal agencies audit revenues and spending, determine if financial activity met legal restraints, and evaluate the effectiveness of government programs at the end of each fiscal year and on an ongoing basis.

Policy Challenges We Face examines significant fiscal policy issues that Oklahoma should address. These include the likelihood that we cannot maintain current services with our existing revenue system and an inequitable and inadequate tax system.

Key themes of this section are:

• Oklahoma often makes financial decisions for the short term but rarely considers the long-term impacts on taxpayers and government services.
• Oklahoma faces serious and lasting fiscal challenges that will require us to think more strategically about how we will pay for the cost of providing public services.

Next Steps provides links to a variety of local, state, and national sources of budget and tax information. It also gives suggestions as to how you as citizens can get involved to make the system more responsive to your needs.

We hope the Guide will provide you with most of the basic facts you need on Oklahoma government finances. It also will challenge you to consider not only how we currently collect and allocate public money, but how we can do so in a more effective, efficient, and fair manner that best meets the needs of Oklahomans.

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