Last week, the Oklahoma Legislature passed a balanced budget without any tax increases to Oklahomans. The budget preserved education funding with minimal cuts of 2.3% that are mostly offset by federal CARES act money while other state agencies received average cuts by approximately 4% or less. However, on Wednesday, the Governor vetoed four of the Fiscal Year 2021 budget bills: HB2741, HB2742, HB2743 and SB1922. Within hours, the Legislature voted to override the vetoes with overwhelming support.
These vetoes would have triggered a total cut to common education of $370,191,102, or a 12.05% cut, which is why I joined many of my colleagues in the Legislature and voted to overturn these vetoes and stabilize the FY21 budget!
Despite what has been said recently in the media, the Legislature is not taking a single dime from state pension funds, nor are we delaying our 8-year road and bridges planned project schedule. There is no current or future impact to the pension benefits of state retirees and I would oppose any bills that harmed the pension retirement system for our state employees. In fact, the Legislature passed a bill this session that would give state employee retirees their first COLA increase in 12 years. This bill has now advanced to the Governor’s desk to be considered signing into law.
Since the early 2000s, the Legislature has been apportioning “off the top” 5% of our sales, use and income tax to the Teachers Retirement System, as well as a portion of the Insurance Premium Tax towards the Fire, Police and Law Enforcement Pension Systems. These apportionments are extra contributions to the system that are added on top of what the systems regularly receive from employee/employer contributions and gains from the market.
What the Legislature passed with wide margins last week was legislation that will reduce these “extra” payments by 25% each of the next two years and increase the “extra” payments by 10% each of the following five years. These bills do not in any way, shape or form affect the corpus of the pension funds nor have an impact on retiree benefits.
House Budget Committee Vice Chair Rep. Kyle Hilbert gave a great analysis of this: “Say you typically make an extra $300 payment on your mortgage each month in order to pay it down more quickly. Then something comes up and you get a slight reduction in your pay so you decide to reduce your extra payment down to $225. That is what the Legislature is proposing. We are still making the monthly mortgage payments and we are still making extra payments – just reducing the extra during this time where all Oklahomans are having to tighten their belts.”
These extra dollars are instead being sent to the 1017 fund in order to mitigate cuts to education. Thanks to these and several other measures, the cut to common education is only 2.3% despite the fact that they are the largest portion of the budget. Most agencies received cuts around or less than 4%.
The Oklahoma Legislature constitutionally has to balance the budget each year. I believe it’s important that Oklahomans know that we filled our large deficit this year without raising any taxes to our Oklahoma taxpayers while maintaining our core state government services that Oklahomans expect to receive.
Please feel free to reach out to me with any questions or concerns that you may have. Thank you for allowing me to represent you and District 51 at the State Capitol.