State leaders have a complicated relationship with federal grant money.
They love federal cash. Just don’t tell them what to do with it or how to do it. That’s caused the state to walk away from tens of millions of dollars meant to help Oklahomans in need.
Oklahoma’s federal lawsuit over family planning grants and Republican Gov. Kevin Stitt’s decision not to participate in a summer food program for a second year are just the latest examples in the state’s love-hate relationship with federal money.
To be sure, such conflicts are nothing new in American history. No matter which party is in office, states – particularly Oklahoma – have chafed at what they perceive as interfering bureaucrats from the federal government in Washington, D.C.
The feds see the relationship mostly as rosy-sounding cooperative federalism, where different levels of government live in perfect harmony. The states at times see it as coercive federalism. But when relations really sour, they call it punitive federalism.
The Oklahoma State Department of Health’s latest annual report notes a change in emphasis when it comes to federal funds. The agency gets more than half of its total budget from federal grants and pass-through funds. Annual state appropriations make up just 15% of its budget.
“Many of our programs receive federal grant funding, which comes with requirements,” reads the report. “However, our focus remains leading Oklahoma to prosperity through health. To do so, we recognize we must put them above federal grant requirements. Therefore, we have adjusted organizational procedures to meet the needs of Oklahomans rather than satisfy federal grant requirements.”
Health department officials said federal funds remain important to the agency’s public health mission. But they want to make sure the money is aligned with other state programs or can be leveraged with programs run by outside partners that also provide public health services.
“We want the funding,” said agency spokeswoman Erica Rankin. “We need the funding, so it’s not that. A lot of times, the funding is siloed, and we spend it in silos, which is not effective.”
Oklahoma challenged the federal government over the loss of $4.5 million in family planning grants that ended when the state refused to publicize an abortion-referral hotline. The grants cover pregnancy testing, cancer screenings, contraceptives, reproductive health counseling and other services.
The state initially told the federal Department of Health and Human Services it would include the hotline during a grant review in March 2023. But Oklahoma changed course a month later when it determined the hotline could violate the state’s prohibition on abortion in the wake of the U.S. Supreme Court’s Dobbs decision. The federal government terminated Oklahoma’s Title X grant in June 2023.
Oklahoma earlier joined a coalition of Republican states suing over the abortion referral hotline in Title X funds when the Biden administration issued a new federal rule in 2021. The state launched its own lawsuit earlier this year after the federal government pulled Oklahoma’s Title X grant.
Tom Hillis, an attorney representing the state, said the federal government was stooping to score-settling with its decision to pull federal funds for family planning. The money helps 25,000 Oklahomans per year and is especially important at county health departments in rural areas, state health department officials said in court documents.
“It’s, ‘State of Oklahoma, you’re going to bow to our wishes,’” Hillis said at a March hearing in federal court in Oklahoma City. “Not that (it) materially helps anybody, because anyone with Google and an iPhone can just Google abortion providers. They’re denying $4.5 million in funding to Oklahoma just because we won’t hand out a card to give the authority of the state to say, ‘Here’s your abortion provider.’”
The state lost at both the federal district court level and a federal appellate court for a temporary injunction in the case. It’s now before Justice Neil Gorsuch for an emergency injunction or a stay at the U.S. Supreme Court. Those types of emergency applications typically go before just one Supreme Court justice responsible for a particular geographic area. Gorsuch is expected to rule in the next few weeks.
U.S. District Judge Joe Heaton told Oklahoma officials they were overreacting when they said the referral hotline would open up state employees to criminal prosecution under Oklahoma’s abortion law.
“For a department of health worker to say to the client sitting across the table, once they request information on abortion and they say, ‘Well, it’s not legal in Oklahoma, but if you want to look at other options, call this number,’ I cannot believe that any serious prosecutor would think that warranted prosecution under the statute,” Heaton said in the March hearing, according to a court transcript. “So I do think that it seems to me that the posture that Oklahoma finds itself in here is at least, in part, it’s a circumstance of its own choosing.”
Oklahoma continues to provide family planning services at county health departments, but it’s using appropriated money from the Legislature as a temporary backstop. Separately, Oklahoma lawmakers put $18 million into the state’s Choosing Childbirth program, which provides money to mostly religious nonprofit crisis pregnancy centers that counsel against abortion.
State Declines Summer Food Help
As the family planning issue makes its way through the courts, Stitt, for a second year, declined to participate in a federal summer food program for low-income children. The program offers $40 per child each month in an electronic benefit transfer card to help their caregivers provide food during summer months. The program is meant as a stop-gap during the summer when children can’t access the federally funded free-and-reduced school lunch programs. The summer EBT initiative started as a pilot program but was made permanent in a bipartisan federal budget deal in 2022.
Stitt said the federal assistance wasn’t needed since Oklahoma just eliminated its share of the grocery sales tax and other food programs would remain available for hungry children during the summer.
A coalition of nonprofits that help with food insecurity across the state rejected those arguments. They said federal programs like summer EBT are designed to work in tandem with state and local initiatives. The summer EBT program would provide an extra $48 million in federal funding for more than 400,000 children in Oklahoma, according to the U.S. Department of Agriculture.
“While existing summer meals programs do provide meaningful relief for some low-income families working to provide consistent, adequate nutrition for their children, it is not a one-size-fits-all solution, especially for working families and families in rural Oklahoma,” said an open letter to Stitt from the organizations this month.
Oklahoma tribes filled in some gaps in the summer EBT program this year after Oklahoma rejected funding last year. All told, more than 200,000 children were covered by tribal nations participating in the summer EBT program.
Chris Bernard, president and CEO of Hunger-Free Oklahoma, said it was puzzling why the state would leave federal money on the table to combat food insecurity. He said last year’s rejection at least made some sense because the federal government expected states to administer a new program in just a short period. Bernard said the state is OK with taking federal money for roads, bridges and broadband internet coverage.
“It’s the nature of the system we’ve built,” Bernard said. “The federal government has the ability to pool a ton of resources to solve big, systemic problems. When you use federal resources, you have to meet some guidance. Just like when the state of Oklahoma runs a program, they talk about fiduciary duty, accountability and making sure tax dollars are spent the way they’re supposed to be; it’s the same principle.”
Bernard said for the most part, children who qualify for summer EBT would also qualify for SNAP benefits, which aren’t taxed. He said that eliminating the state’s sales tax on groceries would have made little difference to families getting those benefits.
“You cannot solve this problem with charity,” Bernard said of food insecurity in Oklahoma. “Charity is a really important piece, especially in a crisis. But to actually address the issue, you need federal dollars because the scale is so big. It is bad business to leave that money on the table. If you don’t agree with that program, you fight that at the federal level. But once the feds have made that money available, you should draw it down or you’re doing a disservice to your state and your people.”
Oklahoma’s Balance of Payments
Oklahoma ranked ninth among the states in 2022 for the proportion of federal money it receives compared to the tax revenue it sends to the federal government, according to the Rockefeller Institute of Government. Oklahoma received almost $17,500 per person in federal funds, compared to federal tax revenue per person of $9,220.
Nationally, federal grants account for about a third of state government funding. They provide more than half of state government funding for health care and public assistance. Federal funds to address the COVID-19 pandemic swelled state government coffers, too, at least temporarily.
Apart from pandemic spending, federal funding to the states has continued to grow in both Republican and Democratic presidential administrations. Since the Reagan administration, some Republicans have tried unsuccessfully to convert many federal programs to block grants, which would give states more flexibility in how to deploy the funds and serve as a check on federal spending growth. But they’ve encountered pushback from their constituents.
A report for the Congressional Research Service in 2019 said apart from a blip in the early 1980s, federal grant funding, the number of federal grants and federal mandates have increased under both Democratic and Republican Congresses and presidents.
“As long as this continues to be the case, and the public continues to express support for specific government programs – even if they generally oppose ‘big’ government as a whole – there is little evidence to suggest that the general historical trends of increasing numbers of federal grants to state and local governments, increasing outlays for those grants, an emphasis on categorical grants, and continued enactment of federal mandates, both funded and unfunded, are likely to change,” the report said.
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Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
