15-02-2025
With slim revenue growth, Oklahoma lawmakers, AG worry about Gov. Stitt's push for tax cuts
Call it a good news/bad news sort of meeting.
Friday's meeting of the Oklahoma State Board of Equalization was filled with numbers and analysis and, depending on who you were, either good or bad news.
The good news? Oklahoma's tax revenue — including both personal income tax and corporate income tax — was up by higher than expected margins.
The bad news? That "up margin" didn't go very far, roughly $72 million.
And though $72 million seems like a lot of money in some areas, in state government, it's not. Especially when considered growth revenue.
Last year the Legislature appropriated $12.47 billion, including more than $8 billion in state funds and roughly $4 billion in reserves. In 2024, lawmakers spent $13.18 billion.
This year, the board certified $8,273,961,689 and federal funds of $175,099,470. Those funds would be on top of the more than $4 billion in reserves, which lawmakers say should only be used for one-time funding projects.
Since December, both state lawmakers and Republican Gov. Kevin Stitt have been waiting on the second report from the Board of Equalization. However, unlike the December 2024 report, the February release of the board's revenue details gives lawmakers a much clearer picture just how much money they have to spend for the 2026 fiscal year.
Lawmakers said they want to make sure they pass a responsible budget. At the same time, the governor doubled down on his push to cut the personal income tax, and eventually phase it out. Earlier this year, both houses of the Legislature pushed back against the governor's $202 million price tag for another tax cut, saying the actual cost was closer to $300 million per year.
Friday afternoon, the numbers presented by the Board of Equalization show that another tax cut may be difficult to pull off.
'The Board of Equalization's certification of lower revenues for FY 2026 is a clear signal that we must approach this budget cycle with both caution and optimism," said state Sen. John Haste, the Broken Arrow Republican who serves as vice chairman of the Senate's Appropriation Committee.
Haste said lawmakers must be mindful of the long-term impact of their budget decisions so those changes do not put the state on a bad fiscal trajectory for future budget years.
"With significant funding requests before us, it is more important than ever to practice fiscal discipline by prioritizing core government services and identifying opportunities to eliminate waste and inefficiencies," he said.
State Rep. Trey Caldwell, chairman of the House Appropriations and Budget Committee, echoed Haste.
"We we have slow revenue growth, we have to be very careful with how we write a budget," he said. "The math doesn't math on the savings numbers."
Caldwell and Haste aren't the only ones with concerns. About an hour before Friday's meeting, Attorney General Gentner Drummond, a member of the Board of Equalization, issued a news release saying he doesn't trust the numbers.
Drummond didn't attend the meeting; neither did state schools Superintendent Ryan Walters, the seventh member of the board.
Drummond said Stitt has taken what should be a serious, thoughtful and collaborative gathering of constitutional officers and "turned it in to a scripted event that is mostly for show. I will not be participating in that.'
Drummond said that he has no confidence in "Gov. Stitt's manufactured budget numbers" being used to justify his proposed tax plan.
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'I am disappointed but not surprised the Governor refused to increase legislative involvement in this process, which is far too important to the future of Oklahoma to be monopolized by a single politician,' Drummond said. 'The budget certification process is in dire need of reform. The status quo allows the Governor to manufacture budget numbers that support his policy agenda, rather than a consensus approach that would reflect legislative input.'
The announcement by Drummond comes a year after he was the lone 'no' vote in the Board of Equalization meeting last February. At the time, his office said that vote was 'a reflection of his lack of confidence in certain revenue estimates that were provided.'
As an example, Drummond pointed to last year's budget certification numbers as evidence the process is rigged.
In December 2023, the Board of Equalization was told there would be $8.98 billion available for appropriation in Fiscal Year 2025. By last February — 10 days after Gov. Stitt laid out his budget priorities — that number had ballooned to $9.04 billion. This increase bolstered the governor's argument for a proposed income tax cut last session, Drummond said.
Now, a year later, the Fiscal Year 2026 numbers are projected to be $295 million less, and the Oklahoma Tax Commission is reporting that expected revenue will drop by $408 million.
'Last December, we were told one amount, then two months later it was a new number that magically was enough to help pay for the Governor's tax cut,' Drummond said. 'Now the Governor is pushing an even more precarious tax plan, using unreliable economic projections and one-time cash on hand to pay for it.'
Drummond called on the Legislature to revise Stitt's proposed tax plan into a more responsible package that provides tax relief while preserving critical funding.
'While I certainly support lowering the tax burden on working families, this tax plan is irresponsible and will drastically harm our ability to fund vital priorities like public education, roads and bridges, and public safety,' Drummond said. 'I have no confidence in the Governor's approach to this matter, but I do believe our legislative leaders will negotiate the best plan for our future. The legislative session is just beginning, and our state senators and state representatives have repeatedly demonstrated their willingness to check the Governor's worst ideas.'
While Stitt said little about Drummond's criticism and the questions raised by the AG about the FY 2026 numbers, Abegail Cave, the governor's spokeswoman, was more direct.
"If Drummond has questions or concerns about the numbers, he should have attended the BOE meeting," she said in a text message to The Oklahoman.
With the debate over just how much there is to spend continuing, Senate Appropriations Chairman Chuck Hall said he wasn't surprised by the dip in revenue.
"It reminds us to be careful and deliberate while reviewing proposals for further revenue cuts," Hall said in a news release. "We currently have around $1.2 billion in new funding requests from executive branch agencies to consider and nearly $500 million in new capital project requests. This Legislature has a track record of passing sound fiscal policies that have set Oklahoma up for success, breaking a cycle of crippling budget shortfalls like we saw in past years."
Hall said he saw the 2026 fiscal year as a chance for Oklahoma to eliminate wasteful spending and focus on making government more efficient.
"I'm confident the Senate, working alongside the House and the governor, will pass a responsible, balanced budget this year that keeps our state government funded, as the constitution requires.'
Lawmakers have until Friday, May 30, to finish their work.
This article originally appeared on Oklahoman: Oklahoma lawmakers worry about tax cuts with newest budget report
