The Oklahoma State Board of Equalization has released the first revenue estimate for fiscal year (FY) 2021. The Board certified $8.3 billion for next year, only a 2.5 percent increase from the current fiscal year. This estimate will be what the Oklahoma legislature uses during the 2020 legislative session to craft an appropriated budget.
This small increase is modest compared to last year’s six percent increase, but it’s important to remember that Oklahoma has seen record-breaking revenue collections over the last two fiscal years. There will assuredly be those who see this “flat” budget as a crisis that needs to be fixed with more revenue, despite these record revenue collections.
When the state’s economy is strong and revenues are growing, it’s easy to talk about fiscal restraint. It’s when things tighten up, as will most likely be the case this year, that those words will be put to the test. While good budgeting decisions were made last year (establishing more robust savings, for example), this year policymakers will need to focus on core government services and resist the urge to enact new “revenue enhancements.”
It’s the first rule of every budget—spend less than you make. Every Oklahoma taxpayer must follow that principle, and it should be no different for government. The fact that the state derives its revenue by force through taxation makes it even more important that this principle be followed. The federal government is a perfect example of what happens when this principle is ignored, as the annual deficit for the federal government has climbed to nearly $1 trillion.
Oklahoma policymakers no longer have a “lack of revenue” as an excuse. After passing $1.1 billion in new revenue since 2015, and after record revenue collections each of the last two years, it’s time for real decision making when it comes to government spending.