OKLAHOMA CITY (Jan. 6, 2012)—After reviewing the newly released FY-2011 Oklahoma Comprehensive Annual Financial Report (CAFR), an analyst at the Oklahoma Council of Public Affairs (OCPA), the state’s leading free-market think tank, is concerned that state government spending continues to climb.
“There’s no denying the state’s budget crisis is real: the crisis is that government spending is at an all-time high," said OCPA fiscal policy director Jonathan Small, a Certified Public Accountant. “Oklahoma doesn’t have a revenue problem. It has a spending problem.”
The CAFR, which is the primary means of reporting the state government’s financial activities, was completed by the Office of State Finance (OSF) for public review on December 30, 2011, and became available online this week.
“Understanding and analyzing the CAFR is probably one of the most important things lawmakers could do,” Small said. “It contains a wealth of information—most importantly the fact that, despite two recessions since FY-2001, total state expenditures have never declined.”
The CAFR shows that, contrary to the conventional wisdom about the state’s current “budget crisis,” total state expenditures grew from $16.61 billion in FY-2010 to $16.64 billion in FY-2011.
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Small pointed to other noteworthy items in the CAFR:
- State of Oklahoma tax collections grew by $605.9 million from FY-2010 to FY-2011.
- While private-sector incomes have declined two years in a row, state and local government incomes have grown every year since 2001.
- Total state spending on social services has grown from $1.59 billion in FY-2005 to $2.25 billion in FY-2011—an increase of 41.7 percent in six years.
- Total state spending on health services has grown from $3.13 billion in FY-2005 to $4.85 billion in FY-2011—an increase of 54.3 percent in six years.
- Total state spending on education has grown from $3.53 billion in FY-2005 to $4.57 billion in FY-2011—an increase of 29.4 percent in six years.
“It is clear from a review of the CAFR that the crisis is not lack of revenue, but rather the enormous growth in government programs,” Small said. “It’s time for lawmakers to take a serious in-depth look at state spending. The relationship between total agency spending and revenue sources other than appropriations deserves particular attention. The lure of ‘free’ federal funds and grants has driven state agencies over the years to create and expand programs, which has the effect of ratcheting up state spending.”
The CAFR can be found online at http://www.ok.gov/OSF/Comptroller/Financial_Reporting.html.