Budget & Tax
Curtis Shelton | January 5, 2023
Abundant tax revenue provides opportunity for reform
The Oklahoma State Board of Equalization (BOE) released its first estimate of how much money will be available for the Legislature to appropriate for the FY 2024 budget. The BOE’s initial estimate for next year’s General Revenue Fund (GRF) is $9.1 billion, a $1.8 billion increase from last year’s initial estimate for 2023.
The BOE is the body that sets the spending limits for the Legislature every year to ensure the state abides by the balanced budget process outlined in the state constitution. The December meeting of the BOE generally determines the amount of money that will be used by the governor when putting together his annual budget book. (The budget book is the budget recommendation the governor releases in tandem with the State of the State address to kick off the legislative session.)
The BOE will meet again in February and that estimate will be what is ultimately used by the Legislature when it crafts the appropriated budget at the end of session in May.
Collections so far this year for FY 2023 have grown well over what was originally estimated and the 2024 estimate by the BOE indicates they don’t expect the collections to fall any time soon. As lawmakers continue to consider tax-reform options, the December BOE meeting is the first official indication of just how much money the state has to work with for next year’s budget.
Over the last two years, roughly $2 billion has been deposited into the state’s rainy-day fund. With collections continuing to grow, lawmakers have ample wiggle room to enact significant tax reform while keeping a relatively flat budget. This is an opportunity to increase Oklahoma’s competitiveness and shore up the gap created by no-income-tax states like Texas and Tennessee. With looming economic uncertainty, it’s an opportunity that can’t be wasted.
Policy Research Fellow
Curtis Shelton currently serves as a policy research fellow for OCPA with a focus on fiscal policy. Curtis graduated Oklahoma State University in 2016 with a Bachelors of Arts in Finance. Previously, he served as a summer intern at OCPA and spent time as a staff accountant for Sutherland Global Services.