Lawmakers now know they will have a record $14 billion to appropriate for fiscal year 2025 following certification of available funds by the State Board of Equalization.
TRANSCRIPT
Dick Pryor: This is Capitol Insider - taking you inside politics, policy and government in Oklahoma. I'm Dick Pryor with Quorum Call publisher Shawn Ashley. Shawn, lawmakers and the governor now know how much money will be available to appropriate for fiscal year 2025. That's the year that begins in July. The State Board of Equalization met and certified funds on Thursday, and it's a record high number.
Shawn Ashley: Fourteen billion dollars. That's $84.6 million more than the board reported in December. And it's also about $1.4 billion more than lawmakers appropriated for fiscal year 2024 - the current fiscal year.
Dick Pryor: Even though there is an $874 million increase in recurring funds over the appropriation in fiscal year 2024, that doesn't mean the same amount will be available every year. The sources of those recurring funds vary up and down from year to year, right?
Shawn Ashley: That's exactly right. And we sometimes forget that. That revenue doesn't always increase and that it does sometimes decrease. But it's been a while since that's happened. Attorney General Gentner Drummond, a member of the Board of Equalization, sort of pointed that out on Thursday. He noted the new forecast for individual income and corporate income tax collections was lower than what the board saw in December. And that made him wonder why sales tax collections are now forecast to increase. “If income taxes are down, reflecting declining income,” Drummond said, “it only makes sense that consumption would decline too, and sales tax collections would decrease as a result.”
Dick Pryor: The House, Senate and governor disagree on what to do with that extra recurring money. It gets complicated. So, what are they thinking?
Shawn Ashley: Governor Stitt called for state agency budgets to remain flat in his State of the State speech and his executive budget. He reiterated that call Thursday, but he did add, “let's strategically invest in certain things.” However, the governor provided no specifics. Lawmakers received more than $1.2 billion in additional funding requests from state agencies, so they are continuing to talk to those agency directors to determine what's a need and what's a want. On Wednesday, for example, the Senate Appropriations Committee endorsed a request from the Oklahoma Health Care Authority for $164 million in state appropriated funds to replace federal funds the agency will not have available in the next fiscal year. The committee also endorsed financing the second phase of the Department of Public Safety’s new training facility. That will cost $4.3 million annually over the next 20 fiscal years.
Dick Pryor: The House, Senate and governor do agree on cutting the state sales tax on groceries, but the grocery tax would not be eliminated. Why not?
Shawn Ashley: And this is rather interesting. Generally, counties and municipalities can only apply sales tax to those things that the state applies sales tax to. So, if the state actually eliminated its sales tax on groceries, counties and municipalities would not be able to tax groceries. And local governments, particularly municipalities, rely almost exclusively on sales tax for their budgets. The sales tax on groceries is a large source of local government revenue, and if local governments could not tax groceries, their budgets would be devastated. That's why both the House and Senate proposals don't eliminate or repeal the sales tax on groceries but reduce it to 0% instead.
Dick Pryor: What should we watch for in the week ahead?
Shawn Ashley: Two legislative weeks remain for bills to be heard and passed out of committees in their chambers of origin - House bills and House committees and Senate bills and Senate committees. Some lawmakers will be spending much more time in committee meetings than they will be on the House or Senate floor.
Dick Pryor: All right, Shawn, thank you.
Shawn Ashley: You're very welcome.
Dick Pryor: For more information, go to quorumcall.online. You can also find audio and transcripts at kgou.org. And look for Capitol Insider where you get podcasts. Until next time, with Shawn Ashley, I'm Dick Pryor.
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