What to know about Gov. Kevin Stitt's proposed budget — and why it might be a tough sell

Oklahoma Governor Kevin Stitt's budget can easily be described in one word: flat — the same spending and a tax cut.

But don't expect state lawmakers to embrace it.

Contained in a 678-page document, Stitt's proposed budget for fiscal year 2025 includes justifications for his priorities — a .25% income tax cut and "flat" agency spending. But the governor's budget — like those of many previous Oklahoma governors ― will be a tough sell to the 149-member Oklahoma Legislature.

"Our job is to write a budget," state Rep. Mark McBride, R-Moore, said in December. "That's the Legislature's job."

Still, each Oklahoma governor submits a budget proposal, although often only pieces of that proposal are reflected in the state's final budget document.

Extra funds from proposed budget should be spent on tax cuts, Gov. Kevin Stitt says

For Stitt, however, the ongoing debate about tax cuts has helped shape his FY 25 budget plan. In the document's executive summary, the governor's office writes that Oklahoma has seen historic investments in education, implementation of moderate tax reform policies and reserves of more than $5 billion. It adds that it's time for a tax cut.

"This budget proposes a reduction to the rate of individual tax rates paid by Oklahomans," the document said. "The governor’s FY 2025 budget recommends a recurring expenditure base of $10,758,555,759; estimates for recurring state revenue for FY 2025 are $11,044,863,917. This equates to an ongoing surplus before any proposed adjustments of $286,308,158."

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Those extra funds, the governor's office said, should be spent on tax relief.

During Monday's State of the State speech, Stitt acknowledged his flat budget plan. "To accomplish our vision and create the most business-friendly state where freedom and opportunity abound for every single person, a top 10 state for generations to come, we need to limit the growth of government — not put more burden on the taxpayers," the governor said.

Oklahoma's economic growth, the governor said, should allow the state to return money to the taxpayers, not seek out bigger government programs. "People are moving here every single day from states like California because they see opportunity and they see freedom and they see they can keep more of their hard-earned money," Stitt said. It’s not tax cuts that will get us in trouble, it’s the unrestricted growth of government. I’m calling for flat budgets across state government this year."

Does Gov. Kevin Stitt's proposed plan include budget cuts?

Still, the governor stopped short of calling for budget cuts, saying he "was not advocating for cutting core services."

"What I am advocating for is a sustainable amount of growth where we are funding needs not wants," he said.

Stitt estimates the costs to reduce the individual income tax rate for the tax year beginning Jan 1, 2025, at $96.4 million.

Stitt's budget also calls for using $80.5 million from excess cash in the Education Reform Revolving Fund to fund a supplemental appropriation "due to the shortage in the Ad Valorem Reimbursement Fund that goes to public schools."

In addition to funds earmarked for the state's education system, the governor's budget calls for reducing funding in several areas, including: $791,401,568 for the Oklahoma Department of Transportation, a reduction of about $10 million; $143,890,616 for the Office of Management and Enterprise Services, a reduction of more than $1.9 million; and $4 million for the Oklahoma Aerospace and Aeronautics Commission, a reduction of $7 million from last year's budget.

Those reductions, the budget notes, are listed as the removal of one-time items.

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Other agencies, such as the Oklahoma Health Care Authority, the University Hospitals Authority and Oklahoma Department of Veterans Affairs would also see reductions — that is, the removal of one-time listings. The Health Care Authority would have $230 million eliminated, the University Hospitals Authority would see $96 million removed, and Veterans Affairs would see a reduction of $10.8 million.

The governor's budget is based on revenue estimates made in December by the Oklahoma State Board of Equalization, which said "recurring revenues available for appropriation are expected to grow from $10,586,911,630 in FY 2024 to $11,044,863,917 in FY 2025."

Stitt's budget notes the estimates do not include federal funds, off-the-top apportionments, and most fees and fines collected by state agencies, but adds that "spending discipline from FY 2021 through FY 2024 has resulted in expected savings and reserve cash of $5.2 billion at the end of FY 2024."

The Senate's Republican leadership, however, has pushed back against those numbers.

Senate Pro Tempore Greg Treat, R-Oklahoma City, said the Senate would wait until the equalization board released its mid-February estimates before making a decision on cuts to the personal income tax.

"We'll know more in mid-February," Treat told The Oklahoman. "We're going to hold our fire until then."

This article originally appeared on Oklahoman: Oklahoma Gov. Kevin Stitt proposes flat budget, tax cuts for 2025