After a week of speculation, Republican state leaders announced Thursday afternoon a high-level agreement on an $8.3 billion budget.
Gov. Kevin Stitt said the plan goes back to goals he laid out in February during his state of the state address.
"No. 1 was to make Oklahoma a top-10 place for business, No. 2 was to deliver Oklahomans more for their money and No. 3 was always to invest in our fellow Oklahomans, and I believe this budget has accomplished all three of those items," Stitt said.
Senate President Pro Tem Greg Treat said the plan for fiscal year 2022 looks a lot different than the one for FY21 announced last May during a socially distanced news conference and with more than $1 billion in cuts.
"We were able to actually restore the cuts and invest strategically in economic diversification, education, infrastructure, health care. This is a very good budget," Treat said.
In February, the state board of equalization certified $9.6 billion in revenue for appropriation. House Speaker Charles McCall said he’s still pleased with the spending plan. It includes $172 million more for common education, with $137 million for the school funding formula; a $30 million film tax incentive; and $42 million for incentives to expand broadband internet access.
"In terms of budgets that I’ve seen over the last nine years serving here in the state of Oklahoma in the House of Representatives, this is the most comprehensive," McCall said.
State Superintendent Joy Hofmeister released a statement commending the budget agreement.
"After such a very challenging year in the wake of the pandemic, the budget agreement announced today is tremendous news for students, teachers and, in fact, all Oklahomans who benefit from a strong educational system," Hofmeister said
The budget also includes a compromise on personal and corporate income tax cuts. Bills the House passed in March would have cut all personal tax brackets by 0.25% and eliminated the corporate income tax over five years of increasing deductions. The agreement Republican leaders announced Thursday reduces the top personal rate 0.25% and cuts the corporate rate from 6% to 4%.
"Of the states that have a corporate tax, that would put us No. 3. There’s five states that have no tax, so we’d be No. 8 in the nation if you look at all the states. The individual tax, that does put us in the top 10 as well," said House Appropriations and Budget Chair Kevin Wallace.
The proposed budget also puts more than $700 million back into state savings accounts. The budget pays for Medicaid expansion by using temporarily increased federal funds in FY22 and by increasing a fee on hospitals in later years.
House Democrats released a statement saying the budget should put less into savings and instead do more for working Oklahomans.
"With this money, we could end the state sales tax on groceries, which would save Oklahomans more than $250 million per year. We could do this and restore and increase the Earned Income Tax Credit, which puts money directly back into the pocket of Oklahoma workers," said Minority Leader Emily Virgin.
Legislation containing the budget agreement is still being written, which drew criticism from independent think tank Oklahoma Policy Institute.
"Oklahoma lags far behind neighboring states both when it comes to how soon budget bills are introduced and how long they are publicly deliberated. Our taxpayers should have the same opportunities as those living in surrounding states when it comes to having a voice in allocating scarce resources in a way that more closely reflects their preferences and our state’s needs," the statement read.
