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What’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.
This Week from OK Policy
Who really wins from tax cuts? (Hint: It’s probably not you): During today’s State of the State address, the governor is very likely going to renew his call for cutting taxes in Oklahoma. As he does so, OK Policy would like to remind our fellow Oklahomans of some key points. [OK Policy]
Policy Matters: ‘Path to zero’ is a dangerous road: During his State of the State address, the governor again pitched plans to cut — and eventually eliminate — Oklahoma’s personal income tax. This so-called “path to zero” is really a dangerous road to the bottom. [Shiloh Kantz / The Journal Record]
Mostly flat budget requests from state’s health, human services agencies (Capitol Update): In the final week of budget hearings before the legislative session begins this week, appropriations subcommittees heard from some of the health and human services agencies. The agencies are asking for basically maintenance increases in their budgets for fiscal year 2026, which starts on July 1, 2025. [Steve Lewis / Capitol Update]
Weekly What’s That
Oklahoma’s Constitution requires that the state’s annual budget be balanced.
The balanced budget requirement is accomplished by limiting appropriations for seven funds, of which the General Revenue Fund is by far the largest, to no more than 95 percent of certified revenue estimates for the upcoming year. This allows for a 5 percent cushion in case of a revenue shortfall. If General Revenue collections fall below 95 percent of the certified estimate, the Director of the Office of Management and Enterprise Services declares a revenue failure and reduces funds going to agencies by however much is necessary to bring spending into balance with revenue collections. If General Revenue Fund revenue exceeds the 95 percent level, the 5 percent cushion flows into the Cash Flow Reserve Fund and can be appropriated in the future. If General Revenue collections exceed 100 percent of the certified amount, the surplus flows into the Constitutional Reserve Fund, also known as the Rainy Day Fund.
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“We’re a balanced budget state. That number has to be balanced. And we either do that with agency cuts or finding revenues, or we balance some of that with some of the cash that we have. I’m not a fan of taking one-time dollars which we refer to as cash and using that to fund recurring expenses.”
-Senate Pro Tempore Lonnie Paxton speaking about the state’s financial picture when considering proposals to cut state revenue through tax cuts. [KFOR]
Editorial of the Week
Editorial: Conservatives lawmakers trying to DOGE their jobs by growing government
An emerging paradox has leaders of the small government party wanting to expand government with mini-versions of President Donald Trump’s newly created Department of Government Efficiency headed by billionaire Elon Musk.
Only, the more local the government, the more DOGE is being used to dodge the responsibility of budget oversight.
The primary job of elected officials is to oversee the spending of tax dollars. That includes making personnel decisions and approving programs — all in the interest of what constituents need.
While the $6.2 trillion sprawling national budget can be confounding, the smaller local budgets don’t present such challenges.
Gov. Kevin Stitt in his State of State address said he’s launching DOGE-OK as a division of the Office of Management and Enterprise Services to focus on flat budgets and limited government. His goal is to have fewer state employees at the end of his term than when he took office in 2019.
The state is not bereft of budget oversight. DOGE-OK duplicates those efforts in an attempt to curry favor with Trump supporters.
Numbers of the Week
- $2.49 billion – Oklahoma businesses exported more than $2.49 billion in goods to Canada and Mexico in 2023, which was nearly half of all the state’s foreign exports that year. Small- and medium-sized firms account for 85% of Oklahoma’s exporters. [Oklahoma Department of Commerce]
- 79% – Four-in-five (79 percent) SNAP households in 2022 included either a child, an elderly individual, or a nonelderly individual with a disability. [U.S. Department of Agriculture]
- 39% – A 2023 study found that businesses with executive teams in the top 25% for diversity (both ethnic diversity and representation of women) are 39% more likely to outperform companies with diversity in the bottom 25%. [McKinsey]
- 20% – One in 5 (20%) of Oklahoma’s extremely low-income renter households are age 65 and older. [National Low-Income Housing Coalition]
- $450 million – Eliminating the state’s portion of the sales tax on groceries last year reduced recurring state revenue by $450 million for a full year, according to Senate leaders. [Oklahoma Voice]
- NOTE: The initial estimated impact for the cut was $370 million, according to the fiscal impact statement for the law (HB 1955) that removed the state’s portion of grocery sales tax.
What We’re Reading
- What Trump’s Trade War Would Mean, in Nine Charts: On February 1, President Donald Trump imposed tariffs on Canada, China, and Mexico—the United States’ largest trading partners. U.S. importers will pay a 25 percent tax on all goods from Canada and Mexico, as Trump tries to force both countries to curb migration and drug trafficking into the United States. Imports from China, meanwhile, will face 10 percent tariffs—punishment for Beijing’s failure to rein in the smuggling of fentanyl precursor chemicals to Canada and Mexico, where they are made into U.S.-bound fentanyl. Here are nine graphics that show the potential economic effects of such tariffs on all four countries. [Council on Foreign Relations]
- 2025 Budget Stakes: Millions Could Lose Needed Food Assistance: Republican proposals Congress could consider this year would take away or reduce food assistance from tens of millions of people who need it to afford groceries. A range of proposals, including a menu of spending cuts that House Republicans are reportedly considering, would fundamentally reshape the Supplemental Nutrition Assistance Program (SNAP), our nation’s most effective and important tool to fight hunger, and weaken food assistance programs focused on helping children in families with low incomes. [Center on Budget and Policy Priorities]
- Eliminating DEI Hurts Everyone, Rural People Included: The idea of a society that doesn’t have to consider class, race, gender, sexuality, or disabilities may seem appealing. But that isn’t the society we were born into. Whether we like to admit it or not, we are still living in an America where these identities and backgrounds are used like a tool by an elite ruling class to keep us separated from each other and our own humanity. [The Daily Yonder]
- 2025 Budget Stakes: Many Households Could Lose Needed Rental Assistance: Affordable housing is a basic human need, but many families’ incomes aren’t high enough to afford market-rate rents in their neighborhoods. Republican federal budget proposals could make this worse. Many households already struggling to afford rent could have their housing assistance taken away, putting them at risk of eviction and homelessness. This year’s funding proposals from House Republicans are insufficient to protect rental assistance for hundreds of thousands of people [Center on Budget and Policy Priorities]
- Health Experts Are Flying Blind Amid Vanishing Public Health Data: “The removal of critical health information from governmental public health sites is chilling and puts the health of the public at risk,” said Richard Besser, a former acting director of the CDC. [Governing]
