Budget & Tax

The facts about revolving funds

November 1, 2017

Curtis Shelton

While recent legislative appropriations have remained relatively stable, total state spending has increased nearly every year. Much of the non-appropriated spending comes from the revolving funds designated for certain state agencies.

Revolving funds are not part of annual legislative appropriations and are usually funded by fees or other dedicated sources. According to data from the Oklahoma House of Representatives, these revolving funds totaled $3,514,936,856 in Fiscal Year 2017. In total, there are more than 1,100 different funds used by state agencies.

Most of the talk about the state budget focuses on legislative appropriations. But this is only about a third of state spending. The recent trend in Oklahoma has been to shift revenue and spending away from the appropriations budget and toward revolving funds or dedicated apportionments. So even when it may look like the state budget or a particular agency has been cut, total spending mostly continues to rise.

Gov. Mary Fallin has used the graphic below to explain her proposals for massive tax increases. The problem is that her numbers ignore non-appropriated funds, like revolving funds, that for some agencies make up the majority of spending. In fact, many of these agencies are spending more in spite of lower appropriations.

State officials have used sky-is-falling rhetoric about cuts to appropriations as a way to push for higher taxes. Though some state agencies rely heavily on appropriations, many spend far more than what they’re given by the legislature. Oklahomans at least deserve an honest, and complete, conversation about state spending before being asked to pay more for government.