The headlines about last week’s Oklahoma Board of Equalization meeting completely missed the punchline. Whereas the official certification packet indicates $631,000,000 additional dollars for Oklahoma spending for FY2022, the real story is that $945,800,000 comes from one-time extra cash and short-term cash infusions.
The reasons for much of the extra cash are:
Two state income tax filing periods in FY2021. The U.S. Treasury temporarily moved the national tax due date from April 15 to July 15 this year due to the pandemic.
Massive amounts of federal spending from direct checks to taxpayers. Payroll Protection Program deposits to businesses & extra unemployment benefits to laid off workers resulted in a 10% boost in Oklahoma personal incomes during a terrible economic recession.
See the table included to visualize FY2021 expenses compared to the FY2022 projection and the resulting base of recurring revenue after accounting for the above.
Thankfully, going into this fiscal upheaval, we had the largest savings account in Oklahoma’s history and Republicans had practiced fiscal restraint in recent budgets. As a result, we must carefully look at this $945.8 million purely as short-term revenue to be utilized exactly how a stimulus is intended – a temporary infusion.
Some of that temporary surplus should be a large deposit to the State’s savings account, which dropped nearly 80% last year from withdrawals. Small businesses are exercising prudence during these strange economic times; and our local elected officials will hopefully continue doing the same.
Oklahoma Authorized Spending: