When Gov. Kevin Stitt vetoed this year’s state budget plan, written by legislators without the governor’s input, he said the plan relied too heavily on one-time funding and set up the state for significant budget challenges next year.
Lawmakers overrode Stitt’s veto, but concerns raised by the governor were highlighted again at this month’s meeting of the Oklahoma State Board of Education, where board members were informed that the state’s K-12 school budget relies substantially on one-time sources of funding that will have to be replaced in the next two years.
Board members were informed that the state appropriation for schools in the 2020-2021 school year includes $73.1 million redirected from the state teachers’ retirement system, $38.8 million redirected away from state law enforcement and firefighter pension systems, $180 million redirected from a state transportation fund, $30 million taken from medical marijuana sales, and $243.6 million from the Constitutional Reserve Fund (the state’s “rainy day” savings fund).
“These are all just one-time allotments, right?” asked board member Jennifer Monies.
“That’s correct, and that’s an important distinction,” said Carolyn Thompson, chief of government affairs for the Oklahoma State Department of Education.
Thompson noted lawmakers have said they will continue to divert $111.9 million from pension funds to schools for another year, “but the other two were one-time allocations” and the pension money will have to be replaced in two years.
While education was supposed to eventually receive some funding from medical marijuana sales in the future, Thompson said this year’s funding from marijuana was not part of that earmarked amount.
Board member William Flanagan noted the one-time funding represents “18 to 20 percent of our total budget.”
“When we start to look at the next year’s budget, we have to make up roughly $550 million just to get back to zero,” Flanagan said. “It fixes a short-term problem, but it doesn’t necessarily solve our long-term problem.”
Thompson said much will depend on how quickly and how strongly the state economy rebounds after the COVID-19 shutdown.
Thompson also noted there is reason for concern regarding roughly $46 million directed to schools from the state’s “Common Education Technology Fund,” which is dependent entirely upon gross production taxes on energy production.
The projections used for that fund were set prior to the pandemic and severe oil market crash, she said.
“There is some concern for this fund actually collecting that $46 million since that was based on a February projection,” Thompson said.
Budget data also shows the cost of teacher benefits continues to grow at a rapid pace and will consume an ever-larger share of whatever growth revenue is generated in future years.
In the 2010 state budget year, the “flexible benefits allowance” given to teachers to cover health insurance expenses consumed $290.6 million. In the 2021 budget year, which begins on July 1, 2020, those expenses will total $535.5 million—an increase of 84 percent.