Education “prioritized above all else” in 2021 state budget, legislative leaders say

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Legislative leaders meet to discuss 2021 state budget on May 4, 2020.

Legislative leaders meet to discuss 2021 state budget on May 4, 2020.

OKLAHOMA CITY (KFOR) – Leaders of the Oklahoma Senate and Oklahoma House of Representatives discussed the details of an agreement on the Fiscal Year 2021 state budget.

Legislative leaders say the agreement is designed to hold education funding harmless while limiting most budget reductions to four percent or less amid the COVID-19 pandemic.

“This is a far better budget than many expected and that should come as a relief to the citizens who rely on core services and the agencies that serve them, given the effect of both depressed oil and gas prices and the pandemic on state revenues,” said Senate President Pro Tempore Greg Treat, R-Oklahoma City. “We successfully avoided the catastrophic cuts some had feared, and I thank the budget chairs and their committees for their hard work and leadership during this difficult time.”

Under the agreement, most of the $1.4 billion, or 17%, revenue hole Gov. Kevin Stitt projected last month is filled by using reserve funds, cutting one-time spending, temporarily redirecting non-appropriated money into the budget, and agency appropriation reductions of 4% or less in most cases.

“The Legislature is pleased to have an agreement stabilizing the budget to the fullest extent possible under the numbers Governor Stitt provided,” said House Speaker Charles McCall, R-Atoka. “The Legislature is strongly united behind this agreement and will enact it quickly to provide certainty to state services at a time it is sorely needed.”

The agreement calls for a total budget of $7.7 billion, which is $237.8 million, or 3%, less than the FY 2020 budget.

Legislative leaders say education was “prioritized above all else,” adding that “with federal COVID-19 relief funds considered, common and higher education would receive no reduction next year – and may receive more money.”

“The Legislature kept its promise and protected education. We are not letting a virus roll back the historic investments Oklahoma has made in education the past few years,” said Senate Appropriations Chairman Roger Thompson, R-Okemah.

Under the agreement, the State Department of Education’s temporary appropriation reduction is 2.5%, or $78.2 million, of its $3 billion appropriation. Recent teacher pay raises will not be impacted.

With relief funds considered, though, common education is projected to receive more money next year than this year. Oklahoma’s $200 million in COVID relief money for common education fully offsets the temporary state funding reduction of $78.2 million, or 2.5%, to common education.

“We are very pleased to agree on an innovative and creative budget that meets our goal to protect classroom funding from reductions. As the branch of government closest to the people, the Legislature is fully confident this is how Oklahomans want their tax dollars prioritized when times get tough,” said House Appropriations and Budget Chairman Kevin Wallace, R-Wellston.

As for state agencies, most receive effective reductions of 4% or less, with core service agencies such as health care, public safety and transportation receiving smaller reductions in some cases, while other agencies with mandatory upcoming spending are held flat or slightly increased.

“The executive branch predicted significantly larger budget cuts would be needed to balance the FY 21 budget. The fact that the Legislature was able to keep reductions to 4% or less should come as welcome news to state agencies,” Treat said. “In addition to the work the Legislature has done, Governor Stitt has the ability to do more to mitigate reductions through many of the emergency funds at his disposal and his authority to innovate within the state agencies he manages directly.”

Oklahoma has received more than $1.25 billion in federal relief funds for COVID-19 expenses – far more than the $237.8 million spending reduction in the budget agreement.

The FY 2020 budget was the largest in state history, and FY 2021’s would be among the largest, as well.

“We’ve been here before, but today Oklahoma is much better positioned to face a fiscal challenge like this. Prudent actions taken in response to the last budget hole three years ago and decisions to save money last year left Oklahoma’s fiscal position stronger than ever and built up strong reserves that have been a saving grace during this unforeseen worldwide pandemic,” Treat said.

Under the legislative agreement, the state would head into FY 2022 with an estimated $600 million in savings funds, apportionment reforms and other flexibility to help stabilize the FY 2022 budget if necessary. In addition, agencies typically have close to $1 billion in agency-specific reserves at their disposal throughout every fiscal year.

“Unlike the last budget hole three years ago, this one won’t require revenue raising measures and should end when the economy restarts,” McCall said. “Oklahoma will bounce back strong and move forward.”

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