OKLAHOMA CITY — Gov. Kevin Stitt proposed a fiscal year 2021 general fund budget Monday with a bottom line virtually unchanged from the current year but with small increases for common education and Medicaid and $160 million to $260 million he considers available for unspecified purposes.
The governor’s budget does not include funding for SoonerCare 2.0, Stitt’s Medicaid proposal, because it is unlikely to become operational until well into Fiscal Year 2022, administration officials said.
The budget also does not include any money for addressing K-12 classroom sizes or support personnel. The only increase to common education is $11 million to annualize teacher pay raises approved a year ago.
In truth, the governor and Legislature are unlikely to have much additional money to spread around this year. Current projections are for a 1% increase — about $70 million — in available funds, and Budget Secretary Mike Mazzei said he fears much of that will have evaporated when the final revenue projection is certified on Feb. 18.
The governor’s budget proposal, delivered each year on the first day of the legislative session, is in fact just a starting point. The final product, after the administration and the Legislature have wrestled over it for four months, might look much different.
The proposal presented Monday projects appropriations of $8.047 billion, or $87 million less than the current year’s final appropriations. But it also includes $163.2 million in unappropriated funds and $100 million for the separate savings fund Stitt set up a year ago.
Most of that $163.2 million comes from $151.7 million identified as “one-time expenses” from the current budget year, which the administration says may not be necessary in FY 2021. Included in this is the $1.5 million appropriated to the Tulsa Race Massacre Centennial Commission in FY 2020.
Other features of the governor’s budget proposal include:
• Transfer of the Kerr-Edmondson state office complex in downtown Tulsa to the Oklahoma State University Regents for use as a veterans clinic. The proposal also includes almost $5 million for the OSU Medical Authority for equipment, recruitment and residency positions.
• A $150 million bond issue for roads and bridges and another $50 million for technology.
• Tepid support for a cost-of-living increase for state retirees. Although the financial position of the state’s pension plans has improved dramatically in the past decade — in part because recipients have received no COLAs — Mazzei said the administration does not favor the 4% across the board increase sought by several lawmakers.
• Mazzei also sounded unenthusiastic about reinstating a refundable earned income tax credit. Asked about the issue, he said the administration is reluctant to make significant changes in the tax code this year but hopes for comprehensive tax reform in 2021.
• While the governor’s budget includes only $11 million in additional appropriations for common education, and Mazzei said the administration would frown on additional tax preferences, Stitt is asking for up to $25 million more for the Oklahoma Equal Opportunity Scholarship tax credit, which goes primarily to donors to private school scholarships. A portion of the tax credits can also be claimed for contributions to support public schools.
• The administration supports legislation filed this session to double the limit on the constitutional reserve fund — commonly known as the Rainy Day Fund. At current budget levels, that would allow the fund to hold as much as $2 billion. The current balance is a little over $800 million with a limit of $1 billion.
• Mazzei revealed the administration plans to phase out the state merit protection office and essentially scrap the current system. The merit protection system was set up decades ago to curb favoritism and patronage in state government but has been criticized as too rigid.