With the fate of about $800 million in federal CARES Act funding undetermined, the Oklahoma Legislature unveiled 12 budget bills Sunday night that reflect a 4 percent cut to most state agencies, a 2.5 percent reduction of appropriations to common education and more than $160 million designated to finance Medicaid expansion.
The bills are linked and explained below, and the annual appropriations summary charts are posted at the end of this story. Owing to the receipt of additional federal dollars, common education will actually receive more total funding for FY 2021 than it did in FY 2020.
“It will actually be an increase of over 3 percent for funding of education even though it is a decrease in appropriations,” said House Appropriations and Budget Chairman Kevin Wallace (R-Wellston).
Lawmakers officially announced the agreement between the House and Senate at a press conference this morning, noting the new Fiscal Year 2021 appropriated budget of about $7.8 billion is only about $400 million less than the Fiscal Year 2020 appropriations of $8.2 billion. Legislators had bristled at a $1.3 billion shortfall estimate from Gov. Kevin Stitt’s administration and the Board of Equalization, arguing they believed the economy would bounce back more quickly and robustly.
Still, they said today they used that estimate as a starting place and used a combination of one-time funds, state savings and other revenues to avoid a $1.3 billion cut to agencies.
“I believe given the situation we are in that the people of Oklahoma won this year with the budget you have before you,” said Senate Appropriations and Budget Chairman Roger Thompson (R-Okemah).
Stitt appears prepared to make the final decisions on how, functionally, agency budgets look in FY 2021. More than $800 million in federal funding from the CARES Act is available to reimburse COVID-19-related expenses. Thompson and Wallace reiterated that they have asked to be part of a “Legislature and executive summit” to discuss that money’s use.
“So far we have received just crickets from him,” said Thompson, who also responded to a question of whether Stitt was in agreement on the budget released today. “The governor and his staff walked out of negotiations in mid-March.”
House Speaker Charles McCall concurred.
“A year ago, nobody anticipated the COVID-19 situation that we face today, which has disrupted the state of Oklahoma’s economy and disrupted people’s health,” said McCall (R-Atoka). “We know that the people of Oklahoma are hurting. They are concerned. There is uncertainty, and what the Legislature’s responsibility is to do is give the people certainty about the core services the government provides.”
Charlie Hannema, chief of communications for Stitt, offered a statement later in the day.
“The governor and his staff are continuing to review the budget package proposed by the Legislature and will not be commenting on specifics of the bills at this time,” Hannema said. “However, Gov. Stitt categorically denies the notion that he ever walked out of a budget meeting. He has an open-door policy to discuss the budget or any other issues with members of the House and Senate.”
House Minority Leader Emily Virgin (D-Norman) also released a statement.
“Not because of COVID-19 but due to a clash of egos, this is one of the most disappointing budgets in my legislative career,” Virgin said. “While the governor sits on $800 million in federal funding, the Legislature is constructing a budget that cuts government agencies like education and human services, takes money away from the pensions of police officers, teachers, firefighters, and public employees, and leaves Oklahomans more vulnerable to future pandemics. We are doing this based on a revenue model created by the governor’s office, but we have not been allowed to view how they actually came up with the number.”
Lawmakers said they believe all 12 bills will be sent to the governor with veto-proof majorities.
“It seems like we have had four sessions within the session this year,” Wallace said of the changing budget projections.
Budget bills to be voted on in JCAB today
Both chambers of the Legislature are scheduled to hold Joint Committees on Appropriations and Budget meetings at 3 p.m. today. The House JCAB will occur on the House floor, but the Senate JCAB will meet in Room 230.
The 12 bills on the agendas appear below along with brief summaries and relevant comments from lawmakers:
- SB 1921 contains a Board of Education appropriation from the Constitutional Reserve Fund. Wallace noted that nearly $200 million in additional federal dollars means common education will actually receive more total dollars than it did in FY 2020.
- SB 1922 appropriates money from the General Revenue Fund to state agencies while also sweeping money out of other funds, including $6.5 million from the Digital Transformation Program Revolving Fund, $6.5 million from the Insurance Department, $6.5 million from the Secretary of State and $8 million from the Department of Tourism.
- SB 1046 increases the Supplemental Hospital Offset Payment Program cap from 2.5 percent to 4 percent beginning July 1, 2020, to fund up to $134 million annually for Medicaid expansion.
- SB 1935 authorizes transfer of additional dollars for Medicaid expansion in FY 2021 from the Revenue Stabilization Fund. Wallace said the total Medicaid expansion cost would be about $164 million.;
- SB 1937 authorizes broader use of the Rate Preservation Fund to sustain Medicaid provider reimbursement rates;
- SB 1073 further specifies the receipt and expenditure of federal Medicaid dollars for Medicaid expansion;
- SB 1931 rejects a recommended 9.2 percent pay raise for all judges by the Board of Judicial Compensation but authorizes 4.5 percent pay increases for all judges. Wallace said a new amendment will be filed to note all judges will receive the pay raise;
- SB 1944 requires — immediately upon passage and approval — the director of the Office of Management and Enterprise Services to publish daily reports of all expenditures of federal CARES Act funds on the state’s Oklahoma Checkbook webpage.
- HB 2741 adjusts apportionment percentages of sales, use and income tax revenue at different rates for different years, making it the most complicated measure in FY 2021’s batch of budget bills. “It is very creative, I will say that for sure,” Wallace quipped.
- HB 2742 also adjusts apportionment percentages for insurance premium taxes to state retirement systems. Wallace and Thompson said the budget deal was made without any agreements on policy measures, such as a cost of living adjustment (COLA) for teacher, firefighter, law enforcement, judicial and state retirees. The House previously advanced a stair-stepped COLA bill unanimously to the Senate, but Thompson said it remains up in the air: “We are going to talk about the COLA bill. This budget is not based upon us in passing the COLA.”
- HB 2743 directs $180 million in FY 2021 and FY 2022 that would otherwise be apportioned to the Department of Transportation’s ROADS Fund to the Education Reform Revolving Fund of the Department of Education;
- HB 2744 authorizes $200 million in bonds for the Department of Transportation to use for construction projects and enables HB 2743’s redirection of otherwise apportioned dollars.
Asked how long lawmakers may remain in session before their constitutional adjournment deadline of May 29, Senate President Pro Tem Greg Treat said that is to be determined.
“Length of the session is anyone’s guess, but we hope we can get done in two or three weeks,” said Treat (R-OKC). “Hopefully we can get our work done quickly. The biggest part of our work is what we are announcing today in the budget agreement. (…) We still have some priority policy that we need to get to the governor’s desk.”
Lawmakers re-opened the State Capitol to the public today with certain screenings, requirements and adjustments in place.
“To bring the public back in to finish this session out strong is very important,” Treat said.
Additional bills setting spending limits for certain state agencies are expected to follow.
Appropriations summary document
(Update: This story was updated at 4:15 p.m. Monday, May 4, to include statements from Hannema and Virgin.)
