Several factors have led to this bountiful scenario.
First, Governor Stitt quickly reopened the State of Oklahoma for business in the spring of 2020, while other states in the country remained locked down. Second, the federal government— through various COVID relief programs— has poured over $30 billion into the State of Oklahoma. And third, legislative leaders have practiced fiscal restraint to keep a lid on the growth of recurring expenses.
Recently released figures project that Oklahoma will have $10.3 billion in appropriations for Fiscal Year 2023. However, before the money grab begins, state leaders will have to educate everyone that $1.3 billion of this is leftover cash and carry-over funds that cannot be relied upon for recurring revenue in the future.
Fortunately, Appropriations Chairman Senator Roger Thompson understands this and has called for bringing the State savings account up to $2.3 billion to ensure the State is prepared for an inevitable downturn sometime in the future. Recently, Senator Thompson said, “we need to continue being fiscally conservative, which calls for passing a mostly flat budget.”
When I was Secretary of Budget during the first year of the Stitt Administration, we worked tirelessly to encourage state leaders to prioritize adequate reserves. This led to the State having $1 billion in savings for the first time in Oklahoma history. These funds were extremely helpful for dealing with the drastic revenue drop in the spring of 2020 during the initial months of the pandemic.
Last year, state leaders wisely reacted to a surge in revenues to replenish the State’s savings account and move it up to approximately $1.8 billion, which still isn’t quite three months’ worth of expenses. Senator Thompson has prudently called for a $500 million deposit into the State savings account. Fiscal conservatism has taken root in Oklahoma. If only the federal government would follow our example and get our national finances in better order!
About the author: Mike Mazzei, CFP®, MPAS®, is the President of Tulsa Wealth Advisors. A Certified Financial Planner professional, and Master Planner Advanced Studies, he created The Financial Freedom Process™ to help individuals leverage their wealth in order to help them achieve their lifetime visions. Mike is a former Oklahoma State Senator (Dist. 25 in Tulsa) & Sec. of Budget. He is the proud husband to Noel and father to 5 great kids.