Smaller state agencies get a bigger piece of the budget, but there’s still a ways to go

Large state agencies and the big problems they address, including education, health care, and mental illness, naturally get most of the attention – and the money – at budget time. Smaller agencies, too, provide services that are equally important to our state’s people and future. These small agencies investigate the most serious crimes and operate our courts. They reduce flooding and pollution and maintain state parks. They regulate industry and recruit new businesses.  They collect taxes and carry out the administrative functions that all the other agencies depend on. If they are not adequately funded, all of government and our society suffer.

Over the past decade, all agencies faced repeated and serious budget cuts, but small agencies were hit hardest, with many seeing their state funding cut by 20 to 50 percent. The 2019 Legislature started restoring funds for some of these agencies. As a result, Oklahomans will see improvements in public safety, water quality, flood control, and government accountability. Most small agencies, though, still receive less funding than they did in FY 2009. The state needs, and can afford, to increase funding for these agencies and their programs.

Smaller agencies’ share of the budget is largest in a decade

Of the state’s $8 billion FY 2020 appropriated budget, 87.9 percent goes to the ten largest appropriated agencies. This leaves the other state agencies competing for just 12 percent of funding.

As seen in the above chart, the share of appropriations for the ten largest agencies in FY 2020 is the smallest in over a decade,  at 87.9 percent. The 3.2 percentage point increase in the share of the budget going to the 54 smallest agencies from FY 2019 is partly due to a $132 million reduction in the Oklahoma Health Care Authority (OHCA) appropriation. Since that agency will receive increased federal funding for Medicaid, the Legislature reduced its appropriation to create a reserve fund to prepare for future reductions in the federal matching rate. In addition, $58 million that went to OHCA in FY 2019 for graduate medical education was removed from its budget this year and distributed to other agencies. 

Small agencies are not adequately funded to deal with current needs

Thirty-five of Oklahoma’s smallest agencies will receive less funding than they did 11 years ago, even without accounting for inflation or population growth. Twenty-two (20 percent) have been cut by 20 percent or more.

Many of these reductions have affected areas where Oklahomans expect a strong and effective public response. For example, since FY 2009, we have seen:

For FY 2020, some smaller agencies got significant budget increases

Economic growth and revenue increases adopted in 2018 provided the opportunity to begin the long process of restoring budgets in smaller agencies. The $140 million in increased funding for these agencies will make Oklahoma sa fer, invest in our future, promote innovation, and hold government more accountable.

The new budget promotes public safety by funding rural firefighting grants and forestry equipment for the Department of Agriculture. The Oklahoma State Bureau of Investigation will increase staffing, and purchase additional sexual assault kits and ammunition. Increased appropriations will fund water quality and laboratory improvements at the Department of Environmental Quality and flood control in the Conservation Commission.  

The budget invests in training physicians to work in rural and under-served areas through the Physicians Manpower Training Commission. It increases economic development funding for the  Department of Commerce. It restores capacity at the Commission for Children and Youth to better coordinate services for children and to secure federal and private-sector funding.

With limited budget resources and growing demand, smaller agencies must create innovative ways to provide services. The legislature funded one such request from the Conservation Commission. This $500,000 appropriation will leverage at least $1.5 million from other sources to create neighborhood-based solutions to poultry farm noise and odor impacts.

Oklahomans have demanded more accountability from state government and this budget responds. It adds 10 additional staff  at the State Auditor and Inspector and creates a new Legislative Office of Fiscal Transparency to review agency budget requests and conduct performance audits.

The state can and must keep increasing smaller agency budgets

The state can keep increasing essential services provided by smaller agencies with little budget impact. An additional $110 million in funding will restore smaller agency budgets to the FY 2009 level. That is just a 1.4 percent increase in overall state appropriations, and well under the amount set aside this year for future downturns. This small investment will pay off many times over in a healthier environment, safer communities, a better quality of life, and a stronger economy.

ABOUT THE AUTHOR

Paul Shinn

Paul Shinn is a Budget and Tax Senior Policy Analyst with OK Policy. Shinn has held budget and finance positions for the Oklahoma House of Representatives, the Department of Human Services, the cities of Oklahoma City and Del City and several local governments in his native Oregon. He's also taught political science and public administration at the University of Oklahoma, University of Central Oklahoma, and California State University Stanislaus. While with the Government Finance Officers Association, Paul worked on consulting and research projects for the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and several state agencies and local governments. He also served as policy analyst for CAP Tulsa. He holds a Ph.D. in Political Science from University of Oklahoma and degrees from the University of Oregon and the University of Maryland College Park. He lives in Oklahoma City with his wife Carmelita.

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