What is total state spending?
September 14, 2012
Total state spending is derived from a number of sources, with less than half of those sources directly appropriated by lawmakers. The “FY-13 Oklahoma Budget Overview,” (prepared for the chairman of the House Appropriations and Budget Committee by the House Fiscal Division), documents total state revenue at approximately $16.8 billion.
On page two of the presentation is a pie chart showing estimated “Total State Revenue by Source” for FY-2013. According to the pie chart, total state revenue summarily is comprised of taxes, fees, grants, income, sales and other sources. See page two of the presentation below (click to enlarge image):
On page two of the presentation is a pie chart showing “Appropriations by Fund Type” for FY-2013. This pie chart shows total appropriations of $6.83 billion, which represents 40.6 percent of total state revenue.
This is confirmed by the Oklahoma Office of State Finance (OSF) in the Oklahoma Comprehensive Annual Financial Report (CAFR). As noted on page seven of the CAFR:
“This report, presented in three sections -Introductory, Financial, and Statistical, is the primary means of reporting the State government's financial activities. Its objectives are to provide a clear picture of the government as a single, unified entity and to provide traditional fund based financial statements.”
According to pages 164 to 165 of the CAFR, total state revenue is approximately $16.8 billion. According to pages 164 to 165 of the CAFR, total state expenditures for FY-2011 were approximately $16.6 Billion.
Based on the CAFR, the presentation by the House Fiscal Division, OSF revenue certification data and data from the Tax Commission, appropriations do not include the total of all state taxes, state fees and other state revenues and expenditures which are authorized by state statutes approved by lawmakers. According to the House Fiscal Division, FY-2011 state appropriations were $6,691,837,225 and according to the Oklahoma Tax Commission’s “Apportionment Of Statutory Revenues By The Oklahoma Tax Commission (for FY-2011)” total revenues apportioned by the Oklahoma Tax Commission (OTC) were $7,433,145,347 for FY-2011. Total net income taxes for the state were $2.7 billion, $2.1 billion directed to the General Revenue Fund (which is the predominant source for lawmaker appropriations). Approximately $644 million is directed/dedicated by state statutes approved by lawmakers, much of it outside the appropriations process. The following are examples of dedicated funds by state lawmakers through state statute (and some voter enacted state law), which facilitates state spending outside of appropriations (FY-2011):
- Oklahoma Firefighter Pension System - $59,876,295 (Insurance Premium Tax)
- Oklahoma Police Pension Retirement System - $24,645,000 (Insurance Premium Tax)
- Oklahoma Law Enforcement Pension Retirement System - $8,166,200 (Motor Vehicle Collections)
- Oklahoma Teacher Retirement System - $137,532,037 (Income Tax)
- Oklahoma Teacher Retirement System - $99,768,957 (Sales Tax)
- Health Employment and Economic Improvement Fund - $32,963,574 (Cigarette Tax & License)
- Rebuild Oklahoma Access & Driver Safety Fund (ROADS Fund) - $215,000,000 (Income Taxes)
- Oklahoma Tourism Capital Improvement Revolving Fund - $11,174,124 (Sales Tax)
- Waste Tire Recycling Indemnity Fund - $5,527,939 (Waste Tire Recycling Fee)
According to the presentation prepared by the House Fiscal Division and the CAFR, federal funds comprise a significant portion of total state expenditures. Many federal/state programs are elective, wherein the new federal program (or funding enhancement) can be accepted or rejected by the executive branch or the legislative branch of the state.
State lawmakers have rejected federal funds that would have increased total state spending. During the 2011 legislative session, the governor and lawmakers rejected approximately $54 million in Obamacare funds designed to build a model Obamacare Exchange. By refusing to accept the funds and refusing to spend them, lawmakers prevented total state spending from increasing by $54 million as it relates to the Obamacare grant in FY-2011 and FY-2012.
State lawmakers have adopted provisions to accept (increase) federal funds to the state, and increase state funds necessary to receive the increased federal funds. The provider tax was passed overwhelmingly by both the House of Representatives and the Oklahoma State Senate, and signed by the governor in 2011. According to the House Fiscal Division, the provider tax will add approximately $152 million in state taxes (none to be appropriated) and an additional $268 million in federal funds to increase Medicaid reimbursement. These are new state and federal funds, un-appropriated, and in addition to the existing state Medicaid program.
State lawmakers are currently faced with a significant decision regarding the acceptance or rejection of federal funds, and the required increase in state funds to accept the federal funds. The U.S. Supreme Court ruled that states have a choice in whether or not to expand the Medicaid system as provided by Obamacare. OCPA’s study has shown that if Oklahoma chooses to expand the Medicaid program as allowed by Obamacare, the state (match) revenue spending for Medicaid could increase significantly.
If lawmakers in Oklahoma refuse the expansion, among other things this limits future growth (cuts growth in total spending) in both state and federal Medicaid spending. If lawmakers in Oklahoma choose the expansion, among other things they have chosen to increase future growth (thus increasing total spending) in both state and federal Medicaid spending.
Based on voter approved laws and state statutes, the CAFR, data from the House Fiscal Division, OSF revenue certification data and data from the Tax Commission, total state spending includes lawmaker appropriations, lawmaker enacted state taxes, state accepted federal grants, state fees and other state revenues and expenditures that are authorized by state statutes approved by lawmakers.