With revenue growing again, can Oklahoma make up for a lost decade? (Capitol Update)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

According to State Treasurer Ken Miller, gross receipts to the state treasury during FY-18 were at an all-time high. Receipts for the 12 months ending June 30, 2018, were $12.18 billion, an increase of $1.2 billion, or 11% over FY-17 gross receipts. According to Treasurer Miller, last month marked the 15th consecutive month of positive growth in monthly gross receipts compared to the prior year. Interestingly, only $33.8 million of the increase in receipts are attributable to revenue measures passed by the legislature in the 2017 session. This year’s tax increases only began to be collected on July 1, so none of the FY-2018 increased revenue is attributable to the 2018 tax measures.

The point of all this is that in Oklahoma our tax base has finally reached and passed the point where it was in 2008 when the great recession — along with tax cuts passed by the legislature — began causing the decline in state funding. This paints a brighter picture for funding when the new legislature organizes in January 2019. Education, health care, mental health, and corrections, along with the other state agencies, will be trying to regain some of what they lost during the past decade.

To put this in perspective, in the budget just passed this year, projected growth in revenue along with carryover from FY-17 and the new revenue passed this year helped legislators find money for the teacher and state employee pay raises. But neither was enough to make up for lost time, and in the meantime the other lost and severely cut services and maintenance needs have piled up. So, despite the positive outlook for next session the competition will be great for the growth funds.

During the past decade, many evidence-based solutions to societal problems have been put on hold because any new investment in services was, as a practical matter, out of the question. The few new ideas that were offered to legislators during the decade were either killed or severely limited in reach because of cost. Emboldened by the possibility of funding, people who care about better, more efficient government, but with a positive impact on people’s lives, will likely start hoping again and bringing their ideas to legislators.

A decade of stillborn progress, at least partly because of revenue failures and budget cuts, could end, and new energy could be unleashed in the state. Or, legislators could decide to crawl our way back up to mediocrity with “growth money.” In other words, if the 2018 session is the end of the revenue measures, we’ll spend several years climbing back to the bottom of the barrel where we seemed comfortable.