Savings effort makes sense
By Jonathan Small
Oklahoma’s revenue collections are setting near-records, and this year’s state appropriated budget has topped $8 billion for the first time, yet Gov. Kevin Stitt and Republican leaders’ willingness to set aside $200 million–an amount equal to just 1.1 percent of total state spending—has been met with shock from some tax consumers.
By the end of the fiscal year, Oklahoma will have $1 billion in savings to guard against the inevitable future day when revenues will falter or decline. That’s a record amount, but represents only about 7 percent of total state spending.
If you don’t save when times are good, when are you going to save money, and how will you handle the inevitable downturns of a state economy that is highly reliant on oil prices? Those who criticize state savings don’t want to face the reality that most families face when doing their own budget: You can’t have everything you want whenever you want it, and everything is not a dire need.
State agencies’ funding requests show many government officials don’t understand that reality. Lawmakers started this year with roughly $600 million more to appropriate than last year. Yet the budget requests submitted by state agencies exceeded that amount by around $1 billion. And this year’s surplus, while primarily the result of economic growth, comes after lawmakers enacted $1.1 billion in annual tax increases and other revenue measures just since 2015.
Though they seldom admit it in frank terms, those who criticize putting money into savings think the answer to all financial challenges is to raise taxes year after year. Budget restraint and savings never enter their calculations.
But we know no amount of money will ever satisfy the demands of tax consumers. Unless legislators set priorities and maintain a healthy savings fund, it puts in danger the financial stability of both state government and the working families taxed to pay for state government.
This year’s budget provides much new spending, including the second round of teacher pay raises in two years, increased classroom funding for schools, and pay raises for many state government workers for the second year in a row. To pair those spending increases with sensible savings is a good idea. The governor and legislative leaders are to be commended for ignoring the rhetoric of those who will never be satisfied and exercising sensible restraint with our tax dollars.
Jonathan Small serves as president of the Oklahoma Council of Public Affairs.
