Claremore senator: It's a difficult budget year at State Capitol
Sen. Ally Seifried, R-Claremore, said this is due in part to lower revenue from the grocery sales tax cut and potentially higher Medicaid costs.
Seifried — along with Reps. Mark Lepak, R-Claremore, and Derrick Hildebrant, R-Catoosa, — discussed the budget process and other topics at the Claremore Area Chamber of Commerce's Eggs & Issues event.
The three lawmakers shared what they've done at the Oklahoma State Capitol since the legislature convened Feb. 3.
This session marks Seifried's third year in Oklahoma City — she first won election to the state Senate in November 2022. Seifried sits on the Senate Appropriations Committee, which is responsible for vetting state agency budgets and other spending. She said state agencies are asking for $1 billion in increases to their budgets this year.
"That's our job to sort through that," Seifried said. "This is a really difficult budget year, as far as the picture, for a variety of reasons."
One is the state will reap less revenue this fiscal year because of the grocery sales tax cut. The 4.5% tax lapsed Aug. 29, 2024 — the Oklahoma Tax Commission calculated the state would lose out on about $239 million in Fiscal Year 2025 and $418 million next fiscal year.
Another is the federal government may require Oklahoma to pay significantly more to offer Medicaid to able-bodied adults. Oklahoma voters approved an expansion to Medicaid to cover more adults in 2020, and since then, the federal government has footed 90% of the bill.
Congress is considering changing the cost split to 60% federal, 40% state. Seifried said that could cost Oklahoma about $600 million annually.
"Our ask to our federal delegation is ... if this were to happen, please don't just make it happen overnight," Seifried said. "We would be able to float it one year, but then the next year not ... it's really different this year trying to figure out a budget."
Lepak is sponsoring a bill that could cut Oklahomans' income taxes but drop the state's FY 2026 revenue by up to $108 million.
House Bill 1539, co-sponsored by Lepak and Sen. Micheal Bergstrom, R-Adair, would require the State Board of Equalization to compare FY 2025 tax collection to FY 2023's in December. If FY 2025's revenue exceeds FY 2023's by $300 million or more, the state would cut personal income tax by 0.25% across all income levels.
This is the "path" to entirely cutting Oklahoma's 4.75% income tax that Gov. Kevin Stitt spoke about in his State of the State address, Lepak said. He said his is one of several bills moving through the legislature toward this purpose.
"It's an idea that's getting work, and that's probably the headline [of my bills]," Lepak said.
Other items the lawmakers discussed included:
— The House of Representatives' new oversight committee structure, which requires each bill to pass two committees before making it to the floor instead of just one. "The idea is a better product, more eyes on something," Lepak said.
— House Bill 1276, Seifried's bid to ban cell phones during the school day. This was the first bill to clear the full House this session. "I think it can really help our students, and it can help our teachers," Seifried said. "I get emails from all across the state saying, 'Please pass this.'"
— House Bill 1076, Hildebrant's "Food Truck Freedom Act." Cities and counties make their own rules for food trucks under state law, but Hildebrant's bill would require the state to promulgate regulations that would apply statewide. "This new bill will have a state licensure," Hildebrant said. "We're still looking for safety and public health ... and the cities still have significant oversight."
— House Bill 2728, the Republican caucus' "Regulations from the Executive in Need of Scrutiny" Act. The REINS Act, which received full House approval, would require state agencies to get extra legislative approval for new rules with a fiscal impact of $1 million or more.
— House Concurrent Resolution 1004, adopted by both chambers and on the way to Secretary of State Josh Cockroft's desk for final approval. The consent decree will reduce wait times to treat defendants declared mentally incompetent to stand trial. "The new agreement is being touted as saving the state about $70 million over the previous agreement," Lepak said.
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