Budget & Tax

Off the top, off the charts

February 28, 2018

Curtis Shelton

Total state appropriations and total state spending are not the same thing. Conversations about the state budget and how much agencies have to spend often focus on a number near $7 billion. This number is only appropriations, not total spending.

Appropriations is what the Legislature is authorized to spend from the general revenue fund. This comes from multiple revenue sources and totaled $6.8 billion in FY 2017. Total state spending is all spending from all funds that the state of Oklahoma spends each year; that number totaled $17.8 billion in FY 2017.

Media outlets and politicians often focus on appropriations and point out that the state has less control over other sources of funds, like federal grants that come with mandates attached. While federal tax dollars do comprise a considerable amount of state revenues, what remains after appropriations and federal money are taken into account is no paltry sum.

The chart shows that appropriations and federal funds do make up most of total state spending. In the early 2000s, appropriations were over half of total state spending (55% in FY 2001). Since then, appropriations as a share of total state spending has been trending down and is currently 39%. Conversely, the share of federal funds has been trending upwards. In FY 2000, federal funds made up roughly 30% of total state spending. Due to federal stimulus funds, the share peaked in FY 2011 at 45% before dropping to 38% for the last few years.

What is left comes from “off the top funds,” state revenues that are earmarked for special uses and therefore not put into the general revenue fund for annual legislative appropriations. These revenues fell during the first few years after the new millennium but have trended up since 2002. From FY 2000 to FY 2017, these revenues doubled from $2 billion to $4.1 billion, or 23% of total state spending. To ignore over $4 billion of state revenues and state spending as irrelevant could only happen in government.

Oklahoma taxpayers deserve a more honest discussion. After all, if other revenue sources, like federal money, don’t really matter, why were taxpayers asked to bail out the Oklahoma Health Department and Health Care Authority to the tune of $140 million?

Sources: https://www.ok.gov/OSF/Comptroller/Financial_Reporting.html