Budget & Tax, Law & Principles

When dependence on federal funds violates spirit of Oklahoma Constitution

November 12, 2015

Trent England

The Oklahoma Constitution, like nearly all state constitutions, requires a balanced budget. In fact, the constitutional history of our state reveals a tightening of this restriction. The original debt clause made allowance for borrowing to satisfy temporary shortfalls, termed “casual deficits.” Today, the current constitutional provision begins with strong, prohibitory language:

The state shall never create or authorize the creation of any debt or obligation, or fund or pay any deficit, against the state, or any department, institution or agency thereof, regardless of its form or the source of money from which it is to be paid, except as may be provided in this section and in Sections 24 and 25 of Article X of the Constitution of the State of Oklahoma. To ensure a balanced annual budget, pursuant to the limitations contained in the foregoing, procedures are herewith established . . .
(Oklahoma Constitution, Article X, Section 23, emphasis added)

While it goes on to make allowances for infrastructure projects and extreme circumstances (like invasion or insurrection), the law and policy of our state and the will of the people are all clear: borrowing money for basic government operations is–or at least, should be–prohibited.

Unfortunately, the growing dependence of our state and local governments on federal funds flagrantly violates this principle. Roughly one-third of the money spent by Oklahoma’s state government comes from the federal government, slightly higher than the national average. And while divided government in Washington, D.C. has over the last few years slowed spending growth and thus reduced federal deficits, the federal government still regularly borrows a substantial amount of the money it spends. That includes money transferred to states.

When Oklahoma policymakers rely on and accept federal funds knowing some of those funds are borrowed, they violate the spirit of our own state Constitution. They also act against the better judgment of the majority of Oklahomans.