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Increased retirement costs from a COLA increase, coupled with the sharp decline in the stock market, may put Oklahoma state pensions at risk.

In 2009, as the Great Recession roiled the economy, Congress responded with an enormous “stimulus” package that supporters claimed would reignite economic growth. However, the $2 trillion legislation recently passed by Congress has more modest goals, according to U.S. Sen. James Lankford.

When the State Board of Equalization approved the revenue estimates used by lawmakers for budget writing, the state faced a shortfall of $85 million. Things have gotten much worse since that February meeting due to the COVID-19/coronavirus event, but Senate President Pro Tempore Greg Treat said the budget’s downward spiral preceded even the virus outbreak.

The total decline for the 2021 state budget could approach $600 million. And that doesn’t appear to account for new spending mandated by Medicaid expansion, which could cost up to $374 million annually.

The Oklahoma Senate has narrowly approved legislation that would use marijuana taxes to fund building repair and construction in school districts with very little local property tax funding.

Legislation that increases state payments to retired government workers, but does not include a direct funding source, has passed the Oklahoma House of Representatives without opposition on a 99-0 vote. The measure is expected to boost the state’s unfunded liability by $800 million to $900 million.

In an email sent to Oklahoma lawmakers this month and later posted online, the Oklahoma Parent Legislative Action Committee (OKPLAC) has urged legislators to kill numerous tax-break measures, including bills that would reduce teachers’ out-of-pocket health insurance costs, improve school security, and support adoption.

House lawmakers have voted to increase benefit payments to some state government retirees, but have chosen not to provide an appropriation to fund the additional expense. Instead, lawmakers voted to raid pension system assets to cover the cost of the higher monthly payments, which will reduce the systems’ solvency, and they advanced the bill despite lacking any firm estimate of the associated cost.

Gov. Kevin Stitt has endorsed Medicaid expansion and urged lawmakers to enact a de facto tax increase to pay for it. A related funding measure was placed on a Feb. 26 committee agenda for a morning vote, but the committee did not convene. The reasons for the delay were not immediately revealed, but challenges continue to surround the tax-increase proposal, ranging from the fact that it will not generate enough revenue to cover the state cost of Medicaid expansion to suggestions the proposal may be illegal .

Less than two years removed from a series of major state shortfalls, members of a Senate committee have voted to raise the cap on a state government savings fund, advancing a key priority of Gov. Kevin Stitt.