Gov. Kevin Stitt and legislative leaders announced they have reached an agreement on this year’s state-appropriated budget, which will total more than $12.7 billion, a 1.27 percent increase over last year.

The budget includes funding for reading reforms, teacher pay raises, and school choice, among other things. Officials will also seek voter approval of welfare reforms to address exploding Medicaid costs that threaten to otherwise defund schools, roads, and public safety.

Officials said the agreement leaves Oklahoma in a good financial position, particularly in comparison to the fiscal chaos that prevailed prior to Stitt’s election in 2018.

“This is my last budget, and we’re putting Oklahoma in a great place,” Stitt said. “I get to end my time serving the people of Oklahoma leaving behind a legacy of conservatism and amazing economic growth.”

“If you go back to January of 2019, if you were to tell me that in January of 2027 the next governor would be able to inherit a state budget with $3 billion-plus in savings, while we’re coming in above the estimate of revenues, while investing for the eighth-out-of-10 years the most money in public education, ever, in the history of the state of Oklahoma, I would take that deal 100 times out of 100,” said House Speaker Kyle Hilbert, R-Bristow.

“I’m very proud of what we’ve accomplished,” said Senate President Pro Tempore Lonnie Paxton, R-Tuttle.

The agreement includes over $230 million in new money for education, including almost $80 million for reading and math programs and $85 million for a $2,000 teacher pay raise.

Stitt noted the agreement was “going to continue to fund education at record levels while promoting education freedom in our state,” a reference to additional funding for the Oklahoma Parental Choice Tax Credit program, which provides refundable tax credits of $5,000 to $7,500 per child to cover the cost of private school tuition.

“You know how important that is to me—putting parents in charge of their kids’ education,” Stitt said.

During Stitt’s two terms in office, officials have approved $1.6 billion in tax cuts while boosting state savings to record levels.

“Every time we’ve cut taxes in Oklahoma, we hear the doom-and-gloom stories about how this is going to wreck our state budget,” Paxton said. “We’ve cut taxes over and over again, and our state revenues continue to grow. We do not have a revenue problem in Oklahoma. We have an expense problem.”

He said controlling expenses will be key to the state’s long-term financial future, particularly addressing the financial problems created by Medicaid expansion. When Medicaid was expanded to add able-bodied adults via a 2020 referendum that passed by an extremely narrow margin, it created long-term financial challenges that must now be addressed, officials said.

Lawmakers plan to send a new state question before voters that will remove Medicaid expansion from the Oklahoma Constitution and place it in state law.

If voters approve that change, legislators will be better able to address cost overruns in the future, Paxton said, because it will allow lawmakers to “get those people who need the help the help they need, but not those who just refuse to go work.”

Stitt suggested that work requirements must be applied to the Medicaid expansion population, which consists of able-bodied adults, many in their prime working years.

If Medicaid expansion is not removed from the Oklahoma Constitution, Hilbert noted that future legislatures will be forced to cut the Medicaid rates paid to medical providers to address cost overruns, which would effectively eliminate access to treatment for most people on the program.

Stitt noted that 24 percent of Oklahoma’s population is currently on Medicaid. In contrast, only about 12 percent of Utah’s population is in the program.

“Future legislatures are going to have to have the ability to change that, to put some work requirements in, to say who do we want to help the most? Is it pregnant women, children, aged, blind, disabled? That’s one population,” Stitt said. “And then you have people that are up to 138 percent of the poverty line that are getting free medical care that don’t have children that should be in the workforce, and we need to put some work requirements on them because it is unsustainable over time.”

Democrats quickly attacked the plan.

“What we heard did not address the fundamental challenges Oklahomans face every day,” said Senate Democratic Leader Julia Kirt of Oklahoma City. “We heard about cutting back services that help people work and support their families. This would mean our co-workers are choosing to spend money on crisis not on prevention, and that is the kind of budget I see so far

“Asking teachers to do more for students with less is not going to move the needle for kids,” said state Sen. Carri Hicks, D-Oklahoma City.

“I don’t see how we can, in good conscience, celebrate finalizing a budget deal this early when many Oklahomans did not get a seat at the table to voice their needs,” said House Democratic Leader Cyndi Munson of Oklahoma City. “Republican leaders are touting record savings to protect future core services, but we have present day core services that need investments today.”

But Hilbert noted that Democrats have contributed little to serious budget discussions this year.

“I’m still waiting to see the Democrats’ proposed budget,” Hilbert said. “Haven’t seen it.”