Oklahoma Government Spending at an All-Time High (Again)

March 6, 2013

The Oklahoma Office of Management and Enterprise Services recently released the Comprehensive Annual Financial Report (CAFR) for the state. The CAFR is the primary means of reporting the state government’s financial activities.

The numbers reveal that government spending is at an all-time high.

Total state expenditures, which were $9.65 billion in fiscal year (FY) 2001, have grown to $16.70 billion in FY-2012—an increase of more than 73 percent in just 11 years. Spending has grown every year since FY-2001, in spite of two recessions. Despite a net decrease of $564 million in federal grants, total state spending increased.

Using total state expenditures is important because appropriations only account for 39 percent of state spending. Numerous programs receive taxpayer money that is non-appropriated. Billions of dollars in non-appropriated taxes, fees, licenses, permits, state-matched federal funds, and other non-appropriated revenues are used to fund retirement systems, higher education scholarships, road and bridge repairs, Medicaid, health insurance premium assistance, and many other programs.

Total state spending on health services (mostly Medicaid) grew from $3.14 billion in FY-2005 to $5.436 billion in FY-2012—an increase of 72.9 percent in just seven years. According to the Oklahoma Health Care Authority (OHCA), more than one million Oklahomans were enrolled in Medicaid in FY-2012, compared to approximately 393,100 in FY-2000. Medicaid covers 64 percent of the births in Oklahoma, and covered 72.9 percent of Oklahoma’s children younger than age five at some point in FY-2012. According to the OHCA, while the rate of federal reimbursements for Medicaid has declined six percentage points, all other revenue spent by Oklahoma on Medicaid has skyrocketed from $585 million in FY-2001 to more than $1.8 billion in FY-2012. That’s an increase of 217 percent.

The bait of “free” federal money has enticed state agencies to create and expand programs, which has had the effect of significantly increasing state spending.

Encouragingly, lawmakers are now turning their attention to total state spending, with the creation of House and Senate committees to review non-appropriated spending.