Budget proposal includes 4% cuts to most state agencies

OKLAHOMA CITY — Leaders of Oklahoma’s Legislature have agreed to a $7.7 billion budget for the upcoming fiscal year that includes cuts of 4% for most state agencies.

Under the budget proposal, the Oklahoma Department of Education faces a 2.5% funding cut that legislators say can be fully filled with $200 million in federal funding for common education given to Oklahoma through the CARES Act.

However, $40 million of the $200 million total remains in question. Although $160 million in CARES Act funds is guaranteed for Oklahoma public schools, Gov. Kevin Stitt received a $40 million education fund to use at his discretion. Stitt has said he could use a portion of the fund to “backfill” a private school scholarship program that is normally financed with tax credits.

Lawmakers crafted the budget that is $238 million, or 3% less, than the current year’s budget around a projected revenue shortfall of $1.3 billion due to low oil prices and the effects of the COVID-19 pandemic on the state budget. Gov. Kevin Stitt previously predicted cuts of 7.5% to most state agencies would be necessary for the fiscal year that begins July 1.

“Given the circumstances with the oil and gas revenue and the global endemic, we did an excellent job of protecting core services, including education,” said Senate Pro Tem Greg Treat, R-Oklahoma City, at a news conference Monday.

Gov. Kevin Stitt was not in attendance when leaders of the House and Senate unveiled the budget agreement. It’s unclear if Stitt supports the budget proposal, but legislators seemed confidant they have the numbers to override a gubernatorial veto.

Under the budget proposal, agencies including the Oklahoma State Department of Health, Department of Human Services, Office of Juvenile Affairs, the State Ethics Commission and the Department of Corrections will each be cut by 4%.

The Oklahoma Health Care Authority, which oversees the state’s Medicaid program will not face any cuts. The State Department of Transportation will see a 1% funding boost. The Department of Environmental Quality will be cut by 10% and the office of Attorney General Mike Hunter will see a 12% funding increase, under the proposal.

Medicaid expansion

The budget proposal funds Stitt’s Medicaid expansion plan, dubbed SoonerCare 2.0 by increasing a hospital fee to net about $134 million in funding.

Legislation included in a package of budget bills proposes raising to 4% the Supplemental Hospital Offset Payment Program, enacted in 2011. So-called SHOPP assesses a fee of up to 4% of annual net patient revenue at 65 Oklahoma hospitals. The fee, which is adjusted annually, currently sits at 2.3%.

CARES Act Transparency

Included in the package of budget bills is legislation that would require the Office of Management and Enterprise Services to post daily on the Oklahoma Checkbook website reports on how the state’s CARES Act funds are being spent.

— Oklahoman staff writer Nuria Martinez-Keel contributed to this report.