(The Center Square) – Oklahoma lawmakers said they have a record $10.4 billion to budget for fiscal year 2023, but they plan to take a conservative approach.
About $1.3 billion come from one-time funds or cash reserves from the previous fiscal year, said Sen. Roger Thompson, R-Okemah, who serves as the Senate Appropriations Committee chair. He said that money would be used best for one-time investments or put into savings and not ongoing expenses.
“When that happens, you just create a hole down the line when those funds are not available,” Thompson said in a statement.
Rep. Kevin Wallace, R-Wellston, the chair of the House Appropriations and Budget Committee, agreed it would be unwise to commit any one-time funds to recurring expenses.
The priorities for lawmakers are core services such as education, health, mental health and public safety. Meanwhile, world events are sure to play a role in budget appropriations. Wallace said lawmakers are keeping an eye on what happens with Russia and Ukraine, as well as the mounting threat of China potentially invading Taiwan.
With energy prices soaring in the U.S., Oklahomans are bound to feel the effect of these international events, which Wallace said will have “ripple effects” on economies worldwide.
“Oklahomans are also well-versed on the volatility of the energy market,” Wallace said. “Our economy is strongly tied to this market, so we must be prudent when planning for our next fiscal year.”
While the $10.4 billion is a record high number for lawmakers to work with, Thompson said he would like to see the Legislature spend only 90% to 91% of the money and keep some for the future, citing economic uncertainties.
“We’ve had all kinds of federal money flow into Oklahoma, including the Payroll Protection Program (PPP) loans, which brought over $8 billion into the state – plus we don’t even have the figures on the child tax credits," Thompson said. "We also need to look at the 7.5 or 7.9% inflation that drives our sales tax collections up."
As taxpayers experience inflation driving up rates on everything from vehicles, homes, appliances and groceries, they also are paying more taxes on all those things. Thompson said those higher tax collections are temporary. Once inflation begins to go back down, it also will signal a decrease in the amount of taxes collected and, therefore, a decrease in the state budget.
Wallace noted this too, saying the positive side is Oklahoma’s economy is performing well but acknowledged part of it is because of federal relief money and higher tax receipts tied to inflation.
“We'll continue to be fiscally conservative as we draft the state budget, always projecting for stability in the future,” Wallace said.
via Oklahoma's Center Square News