Oklahoma lawmakers closed out the 2019 session Thursday after nearly four months of debate on hundreds of bills that could impact the state for years to come.
The final week of the session saw the passage of a flurry of bills, including the $8.1 billion spending bill, along with a plan to build up state savings by socking away $200 million in reserves.
After passing the House 78-12 last week, the Senate gave the final legislative approval to the 2020 fiscal=year budget with a 37-11 vote Tuesday.
The new budget, which takes effect July 1 if the governor signs it, will be Oklahoma’s largest spending measure in state history thanks to a growing economy that left policymakers with a nearly $600 million surplus. And while there is plenty in the budget that lawmakers sought, there were also notable absences.
To help make sense of the 47-page budget plan, and more than a dozen budget-related measures, here are five things to know about how state government will be funded for the next year.
Record Budget Lags Behind Historic Spending Levels
For the second consecutive year, Oklahoma will spend more money than ever before.
The $8.1 billion budget will be about $585 million, or nearly 7.5% more than the current budget, which set the record when lawmakers approved it last year.
Stitt and GOP lawmakers praised the plan for boosting state funding without raising taxes while still putting $200 million in savings to protect against a future economic downturn. There’s an asterisk, though: The increased spending wouldn’t be possible without last year’s tax hikes on motor fuel, oil and gas production, and tobacco products.
After previous years of budget cuts, stagnant growth and mid-year budget failures, how much has state government spending actually been growing?
An Oklahoma Watch analysis of budget data found that this year’s plan would still be less than the state’s fiscal 2009 and 2010 budgets when adjusted for inflation.
As a result, Democrats argued that this year’s spending plan didn’t go far enough.
“Our state agencies were brutally impacted by Republican cuts over the past decade,” said House Minority Leader Emily Virgin, D-Norman. “This budget fails to make these agencies, including the state Department of Education, whole.”
The Biggest Winners
Although many state agencies are still below their inflation-adjusted levels from a decade ago, the 2020 budget gave nearly across-the-board funding bumps.
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In raw dollars, the biggest spending boost went to K-12, with the Department of Education receiving a $155 million, or 5.1%, increase. That includes about $58 million to fund an average $1,220 teacher pay raise and $74 million for school districts to use as they see fit.
Other notable increases include:
- $37.7 million to increase state employee pay.
- $30 million to restore funding for the county improvement for roads and bridges program.
- $19 million for the “Quick Action Closing Fund.”
- $11 million to increase corrections workers’ pay.
- $10 million for the “Smart on Crime” programs through the Department of Mental Health and Substance Abuse Services.
Combined with the Rainy Day Fund, the $200 million set aside as savings will bring the state’s budget reserves to more than $1 billion.
What’s Not in the Bill
Perhaps the most notable absence in the budget was any Medicaid expansion plan or an alternative health care proposal.
An expansion could bring in more than $900 million in federal funds to the state; thanks to a federal match, the state would need to inject about $100 million.
The session began with signs that a form of Medicaid expansion would be considered. But Stitt and GOP leaders decided to hold off and spend the coming months to develop a new health plan for the state.
The debate surrounding the proposal won’t be going away soon. Medicaid expansion backers announced earlier this year that they will try to get a state question on the ballot in 2020 to allow voters to decide if the Legislature refuses to act next session.
Other priorities for Democrats also saw little traction this year.
That includes restoring the refundability of the earned income tax credit, which the Legislature cut in 2016 when lawmakers faced a nearly $900 million shortfall. With a price tag of about $30 million, Democrats argued that restoring the credit could help more than 200,000 working low-income Oklahomans.
During the budget debate, Democrats were vocal in arguing for money to restore the tax credit, especially when lawmakers were choosing to save the $200 million instead of spending it on current needs.
“You need to pay off your debts before you start saving,” said Rep. Forrest Bennett, D-Oklahoma City. “And we have a few debts we haven’t paid.”
Meanwhile, providing retired state employees a cost-of-living adjustment found bipartisan support but failed to cross the finish line.
Despite multiple plans to give retirees anywhere from a 2% to 8% adjustment, lawmakers elected to commission an actuarial study and revisit the issue next year.
Senate Appropriations Committee Chair Roger Thompson, R-Okemah, said lawmakers wanted to be prudent since increasing the cost-of-living adjustment could cost the state hundreds of millions of dollars and jeopardize bond ratings if the state took the money out of pension funds.
“I agree that our retired firefights, police, teachers (and state employees) are important,” he said. “But we need to do what is fiscally sound.”
Criminal Justice Reform Comes up Short
Several bills that could impact how much the state spends on the criminal justice system also failed to clear the Legislature.
House Bill 1269, which would make State Question 780 retroactive, was among the last bills considered by the Senate and passed 34-11. The bill, which referred to SQ 780’s reclassifying some low-level offenses to misdemeanors, was a priority of criminal justice reform advocates.
But bills related to bail reform, commutation processing and drug possession classification came up short this session. Kris Steele, executive director of Oklahomans for Criminal Justice Reform, said he was happy the SQ 780 retroactivity bill passed. But he said Oklahoma still has a long way to go to reduce the incarceration rate.
“The result of this session is that our prison population is going to continue to grow and, unfortunately, Oklahoma is going to continue to be the world leader in incarceration,” Steele said. “We left a lot of impactful bills on the table – bills that would have collectively stopped prison growth in Oklahoma and put us on a path of not being number one.
‘The reality is, the forces that are opposed to reform, the protectors of the status quo, are still very effective inside the walls of this building.”
Senate Minority Leader Kay Floyd, D-Oklahoma City, said it appeared there was a lot of momentum for criminal justice reform a month ago.
“I think there were some groups that were so enthusiastic about criminal justice reform, as I think the majority of the House and Senate are,” Floyd said. “(Pro Tem) Sen. Treat and I are both committed to moving forward with criminal justice reform, and I believe our House colleagues, for the most part, feel the same way. So I believe we can get a lot done over the interim and get the information that some people feel like they need before they can move forward.”
Earlier this week, Stitt announced the formation of the Criminal Justice Reentry, Supervision, Treatment and Opportunity Reform Task Force to study additional criminal justice reform efforts. The 15-member task force will be led by Secretary of Public Safety Chip Keating and is supposed to make recommendations by December.
HB 1269 establishes an expedited commutation process for people serving felony prison sentences for offenses that are now misdemeanors and provides a simplified expungement pathway for people with old possession and low-level property convictions.
Budget Transparency Concerns Raised, Again
It took only about 19 hours from the moment Stitt, flanked by GOP legislative leaders, announced the budget deal last week before the Joint Committee on Appropriations and Budget voted on the bill.
While most bills take weeks or months to navigate the legislative process, it took less than a week before the bill was on its way to the governor’s desk.
Democrats repeatedly objected that GOP leaders were not allowing members, and their constituents, enough time to review the bill.
Virgin added that details and the exact language of the budget weren’t revealed until moments before lawmakers voted in committee to advance the proposal to the Senate and House floor.
“Then we just spent an hour in JCAB and a couple hours on the floor debating it,” she said. “But that’s not sufficient when you’re talking about $8 billion and the one constitutional duty that we have.”
This wasn’t a new concern at the Capitol.
Lawmakers fast-tracked budget bills in four or fewer days every year except one in the last decade. In almost every case, the budget was announced and voted during the final days or day of the legislative session.
But GOP leaders have continued to defend the budget process by saying it’s collaborative, with plenty of transparency between legislative leadership and the governor’s office.
“I made it clear that my door was always open,” Thompson said. “And this has been a transparent-driven process since the beginning.”