OKPOLICY.ORG
As usual, Oklahoma’s legislative session ended with a flurry of fiscal and budget bills in the last two weeks of the session. The legislature has one constitutional requirement every year: pass a balanced budget. In doing so, the legislature decides what they will prioritize and what will be pushed to the sidelines. This is why many consider budgets a moral document — reflecting not just dollars, but values.
The Oklahoma Legislature often waits until the very end of session to complete its only constitutionally required task: passing a balanced budget. As a result, legislators heard hundreds of bills related to the budget in record time. This rushed process is far from ideal, given that legislators have to vote on major spending decisions — including the state’s full budget — within just two to four days.
Oklahoma legislators cut taxes, made large expenditures
Continuing a decades-long trend, supercharged by national politics, Oklahoma lawmakers cut the state’s income tax yet again. House Bill 2764, the bill carrying the tax cut provisions for session 2025, includes an immediate decrease in the personal income tax rate from 4.75 percent to 4.5 percent and eliminates three of the six income brackets. In addition to this, it includes language that could trigger tax cuts in the future if certain revenue requirements are met.
On the surface tax cuts like these might seem helpful — but in reality, they do little for most Oklahomans, according to analysis from the Institute on Taxation and Economic Policy. Two-thirds of the benefit from the 0.25 percent tax cut flows to the wealthiest 20 percent of Oklahomans, while a family earning the state’s median household income of $63,000 would see just $143 in annual savings and a family earning $25,000 annually would save only $21.
But these modest savings come at a steep cost. This tax cut bill forces the state to do less for Oklahoma communities by limiting financial resources. Lawmakers had better options of providing tax relief. They could have modernized the Sales Tax Relief Credit to provide substantial and targeted relief to low- and middle-income Oklahoma families — a policy that could also be adjusted during economic downturns. Legislators didn’t want to provide real relief; they wanted to get political points for supporting tax cuts.
Lawmakers also approved several other substantial expenditures this session. Some of these included a $25 million increase in the public school funding formula, $200 million for a new pediatric heart hospital at the University of Oklahoma, $300 million to purchase a prison in Lawton, and a $20 million dollar increase to the ROADS funds.
The budget missed the mark: What was left out
Despite significant appropriations to projects and agencies, the budget still falls short of meeting Oklahoma’s needs. During impassioned debates, legislators made explicit some of these needs. Sen. Rader highlighted, among other things, the shrinking size of state government and the estimated $500 million required to address rural water infrastructure around the state. Even with a $20 million dollar investment in Oklahoma’s roads, there is still a need for $20 billion in deferred maintenance. And then there is the continued underfunding of public education.
Despite investing an additional $25 million in the public school funding formula, the increase does little to move the needle. In 2025, Oklahoma ranks 47th in the nation for K-12 per pupil funding. Some lawmakers pointed to other public education investments — including an additional $89 million appropriated to support flex benefits for teachers — but overall these increases still fall short. Instead, the budget clearly prioritizes private schools over public ones. Lawmakers passed a $50 million increase in funding for private school voucher/tax credits, bringing the total next year to $250 million for a program that served 37,000 private school students last year. Contrast this with the $25 million funding formula increase to serve Oklahoma’s nearly 700,000 public school students.
Legislators know this funding increase for public schools is inadequate to cover its many unmet needs. And during Senate debate on the budget, lawmakers sidestepped questions about whether the funding formula increase accounted for inflation or enrollment growth. Instead of answering directly, the bill’s author gave a broad statement about the budget supporting the goal of providing quality education — without addressing the core concerns.
Legislators have set Oklahoma on an unsustainable budget path. To fund the Fiscal Year 2026 budget, which begins July 1, 2025, lawmakers decided to use one-time funds from state savings — $38 million from rainy day fund and $238 million from revenue stabilization fund — while simultaneously cutting taxes and reducing recurring revenue even further. These decisions weaken the state’s ability to respond to future crises. Agencies are repeatedly told, year after year, to submit flat budgets, leaving the state with no information about what agencies actually need even as deferred maintenance costs continue to rise. According to the Legislative Office of Fiscal Transparency’s 2024 Budget Stress Test Report, Oklahoma’s current savings and reserves of $3.5 billion (excluding the Rate Preservation Fund) would be more than enough to weather a mild downturn, but would be half as much as the state would need to completely protect Oklahoman’s from a moderate downturn. Some legislators appear comfortable with the idea of a moderate downturn that would cut services. That should not be how a state prepares for economic uncertainty, especially as looming cuts to federal safety net programs threaten to leave Oklahoma in a very precarious position.
Budget transparency nowhere to be found, politics took over
Lawmakers made claims stating their continued commitment to budget transparency this year, but not much came of them — aside from the Senate releasing its own budget portal. Last year’s session was the most transparent budget session in state history. It was far from efficient — very few people have the time to watch days worth of live streamed budget proceedings, each lasting for hours — but at least the process was done in the public eye, and rank-and-file legislative members knew what was happening. This year, budget transparency took three steps back as a few key players negotiated the entire state budget behind closed doors.
Joint Committee on Appropriation and Budget (JCAB) bills are not required to follow the same legislative rules as other bills and can be amended, heard, and passed in record time. This session, JCAB bills moved through the legislative process swiftly — flying through both chambers’ JCAB committees, hitting the floors of both chambers, and landing on the governor’s desk in just five days. The 94 budget bills were released to lawmakers and the general public starting on Monday, May 19, the same day as the committee meeting to approve them. It is difficult to have honest, informed discussions about the state’s emergency preparedness when only a handful of lawmakers and the governor are making state fiscal decisions behind closed doors, leaving the majority of lawmakers from both parties and the public in the dark. This impossibly short window to consider these budget bills created frustration amongst lawmakers on both sides of the aisle, which is especially apparent during debates, like the one preceding a vote on the purchase of the Lawton prison, where many questions remained unanswered.
Budget transparency must be held to higher standards with clearly outlined goals. Lawmakers should prioritize starting the budget process earlier in the session, having more voices in the room, and creating a singular budget portal that includes the House, Senate, Governor, and agency positions — along with explanations for the rejection or approval of funding. At the core of these recommendations is an opportunity to increase taxpayer’s trust in their government and the legislative process, an outcome that all elected officials should strive for.
Legislators can avoid these shortcoming in the 2026 session
The 2025 legislative session left much to be desired. Legislators missed an opportunity to adequately fund Oklahoma’s state services and make meaningful improvements to everyday Oklahoman’s lives.
But all is not lost. Legislators can use the interim session to better prepare for the 2026 session:
- Attend interim studies: Legislators should commit to attending interim studies. Interim studies are notoriously underattended, but they provide an opportunity to learn about a policy area and explore solutions that can be implemented in future legislation to benefit everyday Oklahomans.
- Push for a more transparent budget process: Legislators on both sides of the aisle should recommend to their leadership a more transparent budget process that includes more members and is open to the public. Legislators must advocate for their voices and the voices of their constituents to be represented in the budget.
- Center the budget on real needs: Instead of cutting taxes, legislators should focus on trying to improve the material circumstances of everyday Oklahomans through the budget process. They should focus on funding the things that improve daily life: infrastructure, affordable housing, mental health services, anti-hunger programs, and more.
As lawmakers prepare for the 2026 legislative session, they should remember that they work for all people in Oklahoma; they should pass a budget that reflects that. If lawmakers want to build a stronger future for Oklahoma, they need to start by passing a budget that reflects the needs — not the politics — of the people they serve.
