Oklahoma state budget and finances

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Oklahoma state budget

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Budget calendar:  Annual
Fiscal year:  2012
Date signed:  May 24, 2011
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Oklahoma's governor, Mary Fallin, signed the $6.8 billion FY2013 state budget into law on May 29, 2012. The budget increases state spending slightly more than 3% over the FY2012 budget, although most state agencies will receive no increase in state funding.[1]

Oklahoma budgets on an annual cycle and the fiscal year begins on July 1.[2]

Oklahoma has a total state debt of approximately $36,256,896,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the FY2013 state budget gap.[3] The FY2013 state debt total is similar to the FY2012 total of $36,952,387,000.[4]

Oklahoma's total state debt per capita is $9,562.66.[5]

Economic Freedom

A new Fraser Institute report on economic freedom ranks Oklahoma 20th in economic Freedom. Delaware ranks 1st and New Mexico ranks 50th. The study examines the impact of economic freedom on both the level of economic activity and the growth of economic activity. According to the study, the freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions. More governmental restrictions on those choices curbs economic freedom. The study looks at three major categories per state – size of government, taxes and regulations. [6]

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Oklahoma 32% (#16) 35.05% (#18) 41.09% (#12) 39.00% (#14)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[7][8]

Fiscal Year 2013 State Budget

On May 21, 2012, lawmakers and the governor reached a deal on the $6.8 FY2013 budget.[9] The governor signed the budget into law on May 29, 2012.[10] The budget can be found online. [11]

The FY2013 state budget spends 3% more than the FY2012 state budget did.[10]

Higher Education

Higher education funding accounts for 14.8 percent of the state's budget for FY2013, down from 18.6 percent of the budget in FY1980.[12]

K-12 Education

Per pupil spending for K-12 education in the state decreased $706 between FY2008 and FY2013, a drop of 20.3 percent.[13]

Rainy Day Fund

The budget provides for the state to deposit $340 million into its rainy day fund if revenue estimates on which the budget was based hold. The deposit will bring the fund's total to nearly $690 million.[14]

Human Services

One of the increases in the budget is an additional $50 million to the Oklahoma Department of Human Services to bolster child-welfare services as a result of the settlement of a lawsuit over the care of children in its custody.[10]

State Treasurer Ken Miller said on Nov. 3, 2011, that, despite rising state revenues, legislators face challenges in drafting the FY2013 budget. Those challenges include dealing with one-time funds used to plug holes in the FY2012 budget and the expiration of some tax credits. [15] Then in Dec. 2011, state Finance Director Preston Doerflinger said that lawmakers should have $6.5 billion available for the FY2013 budget.

Legislative Proposed Budget

The budget spends approximately $200 million more than legislators were told in February by budget officials that they would have available to spend as a result of federal funds and extra available cash. The budget for FY2013 is 3.2% more than the FY2012 budget of $6.6 million.[9]

The budget keeps spending for most agencies the same as FY2012, with the exception of Human Service and education, which will see increases.[9] Increases include:

  • State Education Department: $52.4 million;
  • CareerTech: $1.4 million for operations;
  • Higher Education: $10 million for operations;
  • Transportation Department: $99 million to repay a transfer of funds this fiscal year.[9]

Governor's Proposed Budget

Gov. Mary Fallin explained that although the state has seen an increase in revenues, she expects that the FY2013 budget will be relatively flat budget because the state must make up for the loss of one-time funds, including those from the federal government. The budget estimate includes the loss of $36 million for FY2013 when a dozen tax credits that were suspended the past two years are expected to resume July 1 and that the state must repay $50 million a year in energy rebates that were not paid out the past two years to oil and natural gas companies to help Oklahoma get through its budget crisis. The estimates also include the loss of about $70 million in revenue when the state personal income tax's top rate drops from 5.5 to 5.25 percent, effective Jan. 1.[16]

Gov. Fallin presented her proposed FY2013 state budget to the legislature when it began its session on Feb. 6, 2011. Gov. Fallin's proposed budget can be found online.[17]


The governor's proposed FY2013 budget spends nearly $6.6 billion, up $124.7 million from the $6.5 billion FY2012 budget. Most agency budgets would remain the same as the current year. Under the budget, the Department of Mental Health and Substance Abuse Services budget would increase $143 million, a 76.4 percent increase, and the Oklahoma Health Care Authority's budget would decrease by $146.7 million, almost 15 percent.[18]

Income Tax Cuts

She proposed reducing state income tax rates, including reducing highest rate of 5.25% down to 3.5% and reducing the income tax brackets, from seven down to three. Personal income taxes bring in about one-third of the state's legislative-appropriated budget. For this fiscal year, personal income taxes are estimated to bring in $1.9 billion of the $6.4 billion budget. The governor said that she would pay for the tax reduction by eliminating tax loopholes, carve-outs and other exceptions, but did not specify which ones.[19]

Fiscal Year 2012 State Budget

See also: state budgets

The FY2012 budget bill can be found [20] The governor signed the $6.4 billion spending plan into law on May 24, 2011.[21] [22] The FY2012 budget was 3.2 percent less than the $6.7 billion FY2011 budget.[23]

As of October 2011, state revenue collections had risen for 20 months in a row, with collections for the past 12 months up almost 9 percent from the prior 12 months. State Treasurer Ken Miller said that Oklahoma regained almost 60 percent of the revenue that disappeared during the recession.[24]

The legislature directed the Department of Central Services to assemble a list of all state-owned property and identify the "most underutilized state properties" of the state's 9,000 properties. Lawmakers have proposed selling some of the properties and use the revenue from the sales to help fund basic infrastructure needs.[25]

To balance this fiscal year's budget, lawmakers and the governor used $357 million in special cash appropriations and $113 million in federal stimulus funds designated for the state's Medicaid program.[16]

Personal income taxes bring in about one-third of the state's legislative-appropriated budget. In FY2012, personal income taxes are estimated to generate $1.9 billion of the $6.4 billion budget.[26]

Legislative Proposed Budget

The legislature approved a $6.5 billion state budget[27] when the House approved a key piece on May 13, 2011, and sent it to the Senate. The budget cuts cuts $238 million from state appropriations,[28] trimming funding for most state agencies from between less than 1 percent to 9 percent. The FY2012 budget is 3.2 percent less than the $6.7 billion FY2011 budget.[29]

Legislators had been approved to spend $6.3 billion based on revenue projections by the Oklahoma Tax Commission. To address a lawmakers plugged a $500 million shortfall, lawmakers turned to $120 million in cash flow reserves and also used money from a $70 million transportation bond issue, revenue from state agency revolving funds and remaining stimulus funds.[27]

Budget Cuts[28]

  • State finance office was cut by $1.4 million
  • Department of Consumer Credit will lose more than $200,000, of its $535,000 appropriation
  • Oklahoma Health Care Authority was cut by $9.9 million, about 1 percent of the authority’s appropriations
  • The prison system will lose $2.3 million
  • Education-related funding will lose $167.4 million

Funding Increases[28]

  • The Attorney General's Office will receive an 8.3 percent increase in its appropriation
  • Department of Central Services will see funding increase by 8.4 percent, or $1.3 million, due in part to moving the Oklahoma Supreme Court from the Capitol across the street to the Wiley Post Building and the replacement of a $479,000 boiler in one of the state office buildings.
  • The Corporation Commission will see an additional $1.2 million because it was losing $2 million in federal funding because of its inability to enforce certain regulations and also because it needed to be compensated for an inadvertent “double cut” imposed on its budget several years ago.

Collective Bargaining Issue

On Feb. 23, 2011, the House General Government Committee, which is controlled by Republicas, approved HB 1576, which would repeal the Municipal Employees Collective Bargaining Act, which required cities with populations greater than 35,000 to collectively bargain with their workers.[30] The new bill, which now goes before the full House, would end collective bargaining by municipal workers in the state's 13 largest cities.[31][32]

Budget Cuts

Gov. Mary Fallin recommend on Feb. 3, 2011, 3% cuts in the state's next budget for priority areas and 5% for other agencies.[33] Previously, Sen. David Myers, the new head of the Senate Appropriations Committee, told agency heads on Jan. 13, 2011, to prepare for funding cuts of up to 10 percent and directed them to produce plans on how to make the reductions.[34]

Significant budget cuts are expected to come from education, which accounts for more than 50% of state funding.[34] Passage of SQ 744 would require the state to raise to raise its per-pupil expenditure to the average of surrounding states, which could cost the state about $392 million in the 2012 fiscal year.[35]

Gov. Fallin said she will not halt an automatic 0.25% reduction in the state's top income tax rate effective Jan. 1, 2012, a tax cut would reduce revenues by $120 million a year.[34]

Budget transparency

Oklahoma OpenBooks is the name of the publicly available website created by the Oklahoma government. It discloses information about Oklahoma's spending and budget, and is managed by the Office of State Finance. It is one of the few state websites that passes all five criteria of the Sunshine Review's transparency checklist.

Government tools

The Oklahoma OpenBooks page provides a searchable database of state expenditures and revenues. How often the Office of State Finance updates the database varies, depending upon the type of information being updated. For example, payroll and expenditures information is updated monthly, whereas the list of vendors is updated annually.[36]

The following table is helpful in evaluating the level of transparency provided by Oklahoma OpenBooks:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Oklahoma OpenBooks Y
600px-Yes check.png
600px-Yes check.png
600px-Yes check.png
600px-Red x.png
600px-Yes check.png
600px-Yes check.png
See also: Evaluation of Oklahoma state website

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Oklahoma, which measures state transparency as of September 2011 using indicators from a range of organizations. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[37][38]

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[39][40]

Accounting principles

See also: Oklahoma government accounting principles

The Oklahoma State Auditor and Inspector audits state and local agencies in the state, publishing its audit reports online. The Oklahoma State Auditor and Inspector is a statewide elected position serving a 4-year term. The office of Examiner and Inspector and the State Auditor was consolidated in a special election on July 22, 1975.[41]

The Institute for Truth in Accounting (IFTA) rates Oklahoma “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Oklahoma's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[42] Oklahoma'sCAFRs are annual publications of the Oklahoma Office of State Finance and prepared by the Division of Central Accounting and Reporting. The Oklahoma State Comptroller directs the daily operations of the Division of Central Accounting and Reporting. Brenda Bolander is Oklahoma's State Comptroller and Michael Clingman is Director (appointed by the Governor and approved by the Senate) of the Oklahoma Office of State Finance.[43][44]

Credit Ratings

Credit Rating Fitch Moody's S&P
Oklahoma[45] AA Aa3 AA+[46]


Oklahoma received $2.80 billion of federal stimulus funding between February 2009 and June 2013.[47]

Public Employees

See also: Oklahoma public employee salaries and Oklahoma public pensions

According to 2011 Census data, the state of Oklahoma and local governments in the state employed a total of 86,893 people.[48] Of those employees, 59,833 were full-time employees receiving a net pay of $234.2 million per month and 27,060 were part-time employees paid $27.1 million per month.[48] More than 59% of those employees, or 149,326 employees, were in education or higher education.[48]

External links

Additional reading


  1. The Enid News "Fallin inks $6.8 billion budget for Oklahoma government" May 29, 2012
  2. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  3. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  4. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  5. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  6. Fraser Institute, Economic Freedom of North America 2012
  7. US Census Federal Aid to State and Local Governments
  8. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  9. 9.0 9.1 9.2 9.3 Newsok.com "$6.8 billion Oklahoma budget deal reached" May 21, 2012
  10. 10.0 10.1 10.2 The Enid News "Fallin inks $6.8 billion budget for Oklahoma government" May 29, 2012
  11. FY2013 Budget
  12. NewsOK.com "Oklahoma higher education leaders concerned about shrinking state funding" July, 2012
  13. The Tulsa World "Oklahoma school cuts among nation's highest" Sept. 9, 2012
  14. The News Star "Budget turnarounds: Some states socking cash away" Jun 23, 2012
  15. The Tulsa World "Oklahoma tax revenues rise, budget outlook improves" Nov. 3, 2011
  16. 16.0 16.1 NewsOK.com "Estimates project increase in Oklahoma's revenue" Dec. 20, 2011
  17. Governor's Proposed FY2012 Budget
  18. Newson6.com "Governor Fallin Proposes Tax Cuts, Improvements To Bridges, Capitol Building" Feb. 6, 2012
  19. NewsOK.com "Gov. Mary Fallin details state personal income tax reduction plan" Feb. 6, 2012
  20. HB2170, FY2012 Budget Bill
  21. Oklahoma State LegislatureBill Information for HB 2170
  22. NewsOK.com "Estimates project increase in Oklahoma's revenue" Dec. 20, 2011
  23. NewsOK.com "Oklahoma’s state budget deal features missed opportunities, analysts say" May 15, 2011
  24. The Tulsa World "Oklahoma tax revenues rise, budget outlook improves" Nov. 3, 2011
  25. CBS News Money Watch "Okla. lawmaker eyes sale of surplus state property" Nov. 8, 2011
  26. NewsOK.com "Gov. Mary Fallin details state personal income tax reduction plan" Feb. 6, 2012
  27. 27.0 27.1 Businessweek "Oklahoma lawmakers give initial OK to state budget" May 13, 2011
  28. 28.0 28.1 28.2 NewsOK.com "With deep cuts, there are few real winners in budget" May 14, 2011
  29. NewsOK.com "Oklahoma’s state budget deal features missed opportunities, analysts say" May 15, 2011
  30. FoxNews.com "Oklahoma Panel Votes to Repeal Collective Bargaining" Feb. 24, 2011
  31. MSNBC.com "Wis. stalemate: Deal struck, cops sent to Dem homes " Feb. 24, 2011
  32. [HB 1576
  33. The Tulsa World "Fallin seeking state budget cuts" Feb. 5, 2011
  34. 34.0 34.1 34.2 Bloomberg "Okla. faces up to 10 pct. budget cuts" Jan. 13, 2011
  35. Cite error: Invalid <ref> tag; no text was provided for refs named race
  36. How to Use OpenBooks
  37. Institute of Government and Public Affairs
  38. University of Illinois Transparency Profile for Oklahoma
  39. [ University of Illinois 50 State Transparency Comparison
  40. University of Illinois State Transparency Profiles
  41. Audit Reports
  42. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  43. Oklahoma Office of State Finance Web site, retrieved November 6, 2009
  44. CAFRs
  45. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  46. Pew Stateline Infographic on State Credit Ratings
  47. Recovery, "Stimulus Spending by State"
  48. 48.0 48.1 48.2 2011 Oklahoma Public Employment U.S. Census Data