The critical piece in the 2019 legislative session — a budget agreement that brings together Gov. Kevin Stitt and majorities in the House and Senate — is on the table.
Stitt and legislative leaders rolled out an $8.2 billion budget deal that includes a $1,220 teacher pay raise for the vast majority of Oklahoma teachers and more money to reduce class sizes, hire counselors and restore other public school programs that were cut during our recently passed budget disasters.
There’s also a state employee pay raise, a bigger bump for state prison workers, more money for higher education and smart-on-crime reforms.
The budget weans prosecutors from fees and fines for their funding, which eliminates a glaring conflict of interest in the state justice system.
And it does it all with no new taxes.
All of that is excellent. It’s a budget that largely reflects the people’s priorities, the governor’s promises and a positive path forward for the state.
We take exception to only one part of the spending plan — the decision to put $200 million into a currently undefined savings account.
Don’t get us wrong, saving money for a rainy day is a good idea. We’ve just come out of one of the worst fiscal nightmares in state history, and the cushion provided by the Rainy Day Fund was critical.
But the Oklahoma Constitution provides for an orderly way of building up that budget cushion over time. Each year, the state tax commission projects revenue at the beginning of the year, and lawmakers are only allowed to spend 95% of that amount. The remaining 5% is held in cash for the next year. Any over-estimated revenue goes into the Rainy Day Fund.
The Rainy Day Fund currently has a balance of $541.6 million, and the normal course of state finance will add another $400 million to $450 million in a few months. It could even hit the Constitutional cap for the fund.
The problem with the $200 million in additional savings is that it comes out of that 95% that we weren’t meant to save. The money that the Founders (and the voters of Oklahoma) intended to be used for current budgetary needs is being used to augment savings that don’t need augmentation.
The state budget headed toward legislative approval this week does a lot of good, but it should have done about $200 million more.