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CORONAVIRUS CRISISElection 2020Government

Behind the Scenes at the Oklahoma Budget

by State Representative Kevin Wallace
Oklahoma House District 32

Legislative Column

The Legislature is the branch of government tasked with delivering a balanced budget each year. This year, we essentially wrote three budgets, the final one after the devastating effects of COVID-19 and the dramatic decrease in the price of oil and gas brought by a global trade war.

Our budget process starts each summer after our legislative session wraps.

Last fall we held numerous public budget hearings with various state agencies who presented budget committees with their budget requests for Fiscal Year 2021. In January, the House hosted five state agencies that receive the largest appropriation of state dollars. These meetings were held in the House chamber and open to the public.

Even as our session was disrupted by the COVID-19 pandemic, budget work continued, and as soon as we were allowed back in the Capitol, we again held public committee meetings presenting our work, which was voted on by members of the Joint Committee on Appropriations and Budget, made up of Republicans and Democrats from the House and Senate. The men and women on this committee come from all parts of the state of Oklahoma. They were elected by the people they represent, many of whom they know or have met personally while they were out knocking doors during their campaigns and with whom they stay in regular contact through community events, emails, phone calls and personal visits.

I say all this to explain the reasons behind the Legislature’s swift override of the governor’s veto of three appropriations bills that were core to this year’s budget and the budget itself. The governor in his veto messages and in statements to the press gave inaccurate and misleading information. I respect the governor, and I believe he’s done great work in managing the COVID-19 crisis for the state of Oklahoma. I choose to believe his messages are the result of inaccurate information he’s receiving from those who surround him and his newness to state government.

Giving the governor this benefit of the doubt, I must correct some of the information shared.

This $7.7 billion budget passed for FY21 protects our state pension funds. More than a decade ago, our state’s pension funds were in trouble, with funding ratios very low on several of the plans and many facing insolvency. The Legislature decided they needed to step in and provide additional funding to these plans to build up the unfunded ratios and to improve fiscal solvency. We’ve done that for many years with off-the-top apportionments to these plans. The plans are in much better financial shape now, with several funded more than 100% and the teacher’s retirement fund at about 72%. Because of the pandemic, the Legislature decided this year that we could temporarily send this additional money to education. This does not take money from the funds themselves, nor does it change the benefit that retirees receive. In fact, the House passed a Cost of Living Increase, a COLA, which now has the Senate’s approval and awaits the governor’s signature to increase retiree benefits. When our economy recovers, we will again resume sending this additional money at an increased amount to our retirement funds. State retirees are a priority for representatives.

This budget also does not harm transportation or the state’s eight-year roads plan nor the County Improvements for Roads and Bridges fund. In fact, the secretary of transportation told budget leaders this budget preserves these plans. We did move some money from transportation to education, but we offset that amount with the allowance of bonds for some roads projects. Transportation will in fact receive about $4 million additional through this budget transaction for FY21.

This budget prioritizes education. If the Legislature had not overridden the governor’s veto, the cuts to common education would have been about 12.05%. That would have erased all of the good work we’ve done in the past few years to restore funding to our public schools and classrooms and the raises that we were able to give our public school teachers. We could not let that happen.

As the budget chairman in the House of Representatives my door has always been open to the governor and to any other member of the Legislature and to my constituents to listen to their ideas for our state budget and to share information I have. I have been open and transparent each step of the way – when we have money and when we don’t.

The FY21 budget is $237.8 million, or 3%, less than the FY20 budget, which was the largest in state history. This is despite estimates by the governor and the state Board of Equalization that showed we had $1.4 billion, or 17%, less to work with than the amount initially certified in February as a result of the economic effects of COVID-19 and the global trade war over oil and gas.

By using every tool we had available to us – using state reserve funds, cutting some one-time expenses, utilizing apportionment reforms and allowing transportation and conservation dam bonds, we were able to keep cuts to core services to 4% or less in most instances and to 2.5% for public schools. That, in my book, is good work.

Kevin Wallace serves District 32 of the Oklahoma House of Representatives. He can be reached by phone at (405) 557-7368 or via email at [email protected].

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