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Budget surplus to trigger scramble for spending in Oklahoma

December 19, 2018
FILE - In this Nov. 6, 2018 file photo, Oklahoma Republican Governor-elect, Kevin Stitt speaks to his supporters during a watch party in Oklahoma City. Oklahoma's new governor says he's glad the state's economy is rebounding, but he cautioned lawmakers and agency leaders that a $612 million surplus is "not a blank check." Stitt made the comments on Wednesday after the state's Board of Equalization certified a record $8.2 billion in revenue available for lawmakers to spend on next year's budget. (AP Photo/Alonzo Adams)

OKLAHOMA CITY (AP) — A rebounding economy and a boom in the state’s oil patch is leading to record revenue collections in Oklahoma, but the state’s newly elected governor cautioned lawmakers and agency leaders on Wednesday that a $612 million surplus is “not a blank check.”

Gov.-elect Kevin Stitt made the comments after the state’s Board of Equalization certified a record $8.2 billion in revenue available for lawmakers to spend on next year’s budget. That represents an increase of about $612 million over the current year’s spending levels.

“Our economy is starting to take off, unemployment is low, and it’s a really exciting time,” the Republican businessman said. “But I also want to warn the legislators and agency heads that this is not a blank check. This is not something that you can just come in and say: ‘Hey, how can we fund our different pet projects?’”

The state’s improving financial condition is a welcome relief after years of budget cuts that led teachers across the state to walk off the job in the spring to demand more funding for public schools. Stitt, along with Republicans and Democrats in the Legislature, have said additional funding for public schools is a priority next year, even after teachers this year got an average pay hike of $6,100 a year.

The Oklahoma Education Association, the state’s largest teachers union, announced Wednesday they will push for more than $400 million in additional funding for more pay raises, a cost-of-living increase for retirees and $150 million for school operations.

“While 2018 was a step in the right direction, work remains,” said OEA President Alicia Priest.

Stitt will use the $8.2 billion figure certified on Wednesday to build his executive budget that he will present to the Legislature in February. The Board of Equalization will meet again in February to certify the final amount that lawmakers will get to spend.

Budget requests from just a few of the state’s largest state agencies already far exceed the $612 million in additional revenue. The state’s prison system, for example, is seeking more than $1 billion, mostly for the construction of new prison beds. The Department of Education wants $440 million in new revenue, while the state’s colleges and universities are seeking a $100 million boost in funding.

The chairmen of the appropriations committees in the House and Senate also are striking a cautious tone, noting the state has some big-ticket funding items for the upcoming fiscal year, including more than $100 million for graduate medical school programs at the University of Oklahoma and Oklahoma State University.

One thing Republican leaders are not talking about is tax cuts. Both Stitt and Sen. Roger Thompson, chairman of the powerful Senate Appropriations Committee, said tax cuts are not a priority for them this year. Although bills already have been filed to roll back a tax increase on motor vehicle sales, Thompson, R-Okemah, said he’s not interested.

“Right now we need the revenue we have to pay the bills we need to pay, and so it is my intention if they come to my committee, not to hear them,” Thompson said.

Stitt said he also wants to see an increase in the cap on the state’s Rainy Day Fund to $2 billion to help prepare for a downturn. The current cap, based on estimated revenue collections, currently is less than $1 billion.

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Follow Sean Murphy at www.twitter.com/apseanmurphy

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