Governor Stitt signs FY2020 state budget

GOVERNOR SIGNS GENERAL APPROPRIATIONS FOR FY’20, $200 MILLION FOR STATE SAVINGS.

OKLAHOMA CITY, Oklahoma (May, 24, 2019) – Governor Kevin Stitt, joined by House and Senate Republican leadership, today signed into law HB 2765, the general appropriations bill of $8.1 billion for Fiscal Year 2020 (FY’20), and SB 1076, legislation to setting aside $200 million for the state’s savings. 

The FY’20 budget received overwhelming support in the House and Senate, breaking records with the state’s investments in core services while also putting Oklahoma on the path to saving more than $1 billion by the end of FY’20, the largest savings account in state history.

“Congratulations to the Legislature and leadership for their hard work this session. I am proud of the fiscally responsible budget we have signed into law,” said Gov. Stitt. “For the first time in state history, we will increase Oklahoma’s savings account, in order to protect core services in the future, without the law forcing it. For the first time in state history, we will give Oklahoma teachers a pay raise for a second year in a row. For the first time in state history, we will fully fund the Reading Sufficiency Act while also putting an additional $74 million into the funding formula for local classroom needs. For the first time in state history, we will fully fund our roads and bridges, and we will also make the largest deposit into the Quick Action closing fund, helping Oklahoma compete for new jobs. We will move the needle in criminal justice reform by investing in drug courts and diversion programs, and we will reform District Attorneys’ funding model so they are not reliant on high fines, fees and court costs that have created a debtor’s prison. We will prioritize funding for oversight, transparency and audits as well as funding to modernize the delivery of state services, making it customer-focused and cost efficient.”

“This year was capped by a terrific budget deal that makes significant investments in classroom funding, teacher pay raises, and criminal justice reforms,” said President Pro Tempore Greg Treat, R-Oklahoma City. “We also delivered on important policy fronts like constitutional carry, judicial redistricting, and workers’ compensation reforms. The totality of our work this session will bring positive, transformational changes and help make Oklahoma an even better state.”

“This is the best budget we have passed in a long time, and it is a budget that Oklahomans can be proud of,” said Speaker Charles McCall, R-Atoka. “We were able to fully fund many core services, drastically increase funding for public education, provide another teacher pay raise and another state employee pay raise, increase Medicaid provider reimbursement rates and maintain momentum in roads and bridges funding. And we put aside significant savings for the first time. I am grateful for the working relationship I have with Gov. Kevin Stitt and Senate President Pro Tempore Greg Treat, and I am very optimistic about the direction and future of our state.”

The FY2020 Budget summary is as follows:

Common Education
For the first time in state history, Oklahoma teachers will receive a pay raise for two years in a row. For the first time, the Reading Sufficiency Act will be fully funded. With the additional $74M going to the classroom through the funding formula, public education will be funded at the highest levels in state history, exceeding the 2008 watermark of $2.5 billion.

The common education appropriation increased by $158 million, a 5.4% increase, which includes the following funding priorities:

• $58.9 million for an average $1,220 salary increase for 97% of Oklahoma’s public school teachers
• $19 million to pay for cost increases for teachers’ flexible benefit allowance
• $5.5 million for the Reading Sufficiency Act
• $74.3 million for local school districts to use to hire additional teachers, counselors, social works or address their unique needs in their districts.

Higher Education

• $18.1 million for faculty compensation Faculty compensation 3.5 percent increase - $18.1 million
• $3.3 million to fully fund senior concurrent enrollment programs Fully fund senior concurrent enrollment programs - $3.3 million
• $7 million for Section 13 capital offset allocation increase

Career and Technology Education

• $18.3 million funding increase for Career and Technology education

Transportation
For the first time in state history, the Department of Transportation’s 8-year program is fully funded, and the state is repaying the county roads program $30 million so that counties can get back on track with their 5-year plan.

Agriculture and Rural Oklahoma

• $500,000 to fund a public-private partnership to maintain clean water in Northeast Oklahoma and areas with high poultry density
• $90,000 to hire an additional state veterinarian
• $1.1 million for Wildfire mitigation funding and additional resources for rural fire fighters
• $1.6 million to improve rural flood control dams

GOVERNMENT MODERNIZATION
For the first time in state history, state employees will get a pay raise two consecutive years. Also, for the first time, Oklahoma will set aside one-time funds to bring state government services into the 21st century through digital modernization. This will make government more transparent, more cost efficient, and customer-focused.

• $37.7 million for an additional state employee pay raise of up to $1,500. This builds upon the state employee pay raises given in FY’2019 of up to $2,000 per employee.
• $15 million for digital transformation of state government services to enhance transparency and make customer service more efficient and effective
• $1.7 million for the creation of the Legislative Office of Fiscal Transparency
• $700,000 to hire more auditors and increase the State Auditor’s office capability to conduct more regular audits across state agencies

PUBLIC SAFETY

• Funding prioritization for two new trooper academies, putting an estimated 80 more troopers on the roads in 2020.
• $2 per hour pay increase for correctional officers, which is a 14% raise. This will bring correctional officer pay to the regional market average and in turn will bolster the Department’s recruitment effort to fill vacancies.
• $1 million to reduce the backlog of untested rape kits

CRIMINAL JUSTICE
The $10 million for Smart on Crimes programs in the Department of Mental Health sets a historic new level of funding for diversion programs to reduce recidivism rates. The $20 million additional dollars appropriated to District Attorney makes historic changes to replace the 991 and supervision fees funding DA offices.

• $20 million to reform the funding of District Attorney offices
• $10 million for Smart on Crime programs through the Department of Mental Health and Substance Abuse Services
• $1.5 million for the Women in Recovery diversion program
• $1.7 million to provide drug court alternatives through mental health

JOBS / ECONOMIC DEVELOPMENT
For the first time in state history, Oklahoma will make the largest deposit into the Quick Action closing fund, helping state leaders compete for new jobs to diversify our state’s economy while the nation’s economy is booming.

• $19 million for the Quick Action Closing Fund, prioritizing recruitment opportunities to grow Oklahoma
• $1 million for additional job growth and economic development specifically in the automotive industry and in aerospace through the Department of Commerce’s Aerospace Commerce Economic Services (ACES) program
• $1 million to assist new entrepreneurs and small business innovators through the Oklahoma Center for Advancement of Science and Technology 

Healthcare

• FMAP increase will allow for a 5 percent provider rate increase in FY’20, which in turn will increase funding support to rural hospital and nursing homes
• $62.8 million for Graduate Medical Education program to support physician training for rural hospitals
• $29 million saved to a new preservation fund to preserve Medicaid provider rates when the federal government’s 3-year rolling average results in a rate decline.
• $10 million to decrease the Developmental Disability Services wait list and increase provider rates
• $4.6 million to increase immunizations and staff county health departments throughout the state

Senate passes $8.1B state budget

Senate approves state budget

Budget includes huge investment in classrooms, teacher & state employee pay raises, and criminal justice reform funding

OKLAHOMA CITY – The Oklahoma Senate on Tuesday gave final approval to the state budget, which includes huge investments in public school classrooms, a teacher and state employee pay raise, as well as significant investments in criminal justice reforms all while saving $200 million.

The Fiscal Year 2020 budget bill, House Bill 2765, passed on a 37-11 vote.

“This is a tremendous budget for Oklahoma because it makes huge investments in our classrooms, gives teachers and state employees another significant pay raise, puts money toward criminal justice reforms, and saves $200 million to help in the event of an economic downturn in the future,” said Senate President Pro Tempore Greg Treat, R-Oklahoma City. “Senate Republicans kept our commitment to invest in education by appropriating $74.4 million for our classrooms. We also addressed our priority to fund criminal justice reforms. The budget also shows fiscal restraint because we’re putting away $200 million in savings, bringing the state’s total amount of savings to $1 billion. I want to thank Senator Roger Thompson, the Senate appropriations chairman, for his hard work, skill, and leadership in crafting this budget deal. I also want to commend the senators who chaired Senate appropriations subcommittee for sharpening their pencils and helping put together a great budget.”

The budget now goes to Governor Kevin Stitt’s desk for consideration.

“Tough choices by the Legislature in recent years put our state in a much better financial position, and because of those decisions we had nearly $600 million in new funding to appropriate. This budget makes great use of those dollars by making a $157.9 million investment in public schools, which includes $74.4 million into our classrooms so local schools can hire more teachers to lower class sizes or purchase classroom supplies. Overall, this is a great budget that makes significant investments in critical services while saving $200 million to help when the inevitable economic downturn hits in the future. I want to thank the Senate appropriations subcommittee chairs who did a tremendous job in delving into the numbers to help us come up with a great budget deal,” said Senator Roger Thompson, R-Okemah.

Among the highlights of the FY’2020 budget include:

• $200 million in savings to help Oklahoma weather a financial crisis; Oklahoma’s total savings at the end of this year will be $1 billion
• EDUCATION
• $157.9 million for common education:
• $1,220 teacher pay raise on average, second-consecutive year for a teacher pay raise.
• $5.5 million for the Reading Sufficiency Act.
• An additional $74.4 million for classroom funding for schools to hire additional teachers to lower class sizes, hire counselors or other support staff, or purchase classroom supplies.
• $18 million for the CareerTech system for pay raises and course additions.
• $28 million for higher education to bolster research programs and provide a professor pay raise.
• $7.5 million for concurrent enrollment
• GOVERNMENT MODERNIZATION
• $37.7 million for a state employee pay raise of up to $1,400, the second-consecutive year for a state employee pay raise. 
• $1.7 million for the creation of the Legislative Office of Fiscal Transparency (LOFT)
• $16.4 million for digital transformation of state government services to enhance transparency and to improve customer service.
• $700,000 to hire more auditors for the State Auditor’s Office to conduct more audits of state agencies.
• CRIMINAL JUSTICE REFORMS
• $20.1 million to reform the funding of District Attorney offices.
• $10 million for “Smart on Crime” programs through the Department of Mental Health and Substance Abuse Services.
• $1.5 million for the Women in Recovery diversion program.
• $1.7 million to expand drug courts options for nonviolent offenders.
• HEALTH CARE
• $62.8 million for Graduate Medical Education program to support physician training.
• $105 million reallocation to increase provider rates for physicians, hospitals and nursing homes.
• $29 million saved to a new preservation fund to preserve Medicaid provider rates when the federal government’s 3-year rolling average results in a rate decline.
• $2 million to decrease Developmental Disability Services (DDSD) wait list.
• $8 million to increase DDSD provider reimbursement rates by 4 percent.
• $4.6 million to increase immunizations and staff county health departments throughout the state.
• RURAL OKLAHOMA
• $500,000 to fund a public-private partnership to maintain clean water in Northeast Oklahoma and areas with high poultry density.
• $1.1 million for wildfire mitigation and additional resources for rural fire fighters.
• $1.5 million to improve rural flood control dams.

House passes $8.1B State Budget

House Passes $8.1 Billion State Budget

Budget Puts $230 Million into Savings, New Money into Classrooms, Teacher Pay Raises and Healthcare

OKLAHOMA CITY – The House of Representatives passed the Fiscal Year-2020 general appropriations bill today, approving an $8.1 billion state budget that includes historic savings, pay raises for teachers and state employees and builds upon the historic investment made in common education by the Legislature last year.

The budget is a $633 million increase – or 7.8 percent – over the FY-2019 appropriated budget. The Legislature provided an additional $157.7 million for common education, which comes just one year after providing $480 million in new funding for public schools. The Legislature has now increased funding for public schools 26.25 percent during the last two years. The $157.7 million in new funding includes an average $1,220 teacher pay raise and $74 million for classrooms and increases to flex benefits.

The budget also includes $230 million in savings, with $29 million of that set aside in an FMAP Preservation fund to be available for future reductions in Oklahoma’s Federal Medical Assistance Percentages (FMAP) rate, a formula used by the federal government to determine each state’s match rate for Medicaid. Those rates fluctuate based upon each state’s per capita income levels. The remaining $201 million will stay in the state’s General Revenue Fund to be saved for future economic downturns. Combined with expected deposits in the state’s Rainy Day Fund, Oklahoma will have close to $1.2 billion in savings by the end of June.

The Legislature provided $37.7 million to give state employees a pay raise for the second consecutive year and an additional $3.3 million to higher education to fully fund concurrent enrollment options, which allows seniors the opportunity to earn college credit while still in high school. The Fiscal Year 2019 budget included $7.5 million for concurrent enrollment, meaning the Legislature has increased funding for the program by $10.8 million since last year, bringing the program’s annual budget up to $11.7 million. Higher education also received a total increase of $28 million for the second consecutive year over the previous year’s appropriation, giving them more than $56 million in new funding during the last two years.

Lawmakers provided $2 million to decrease the wait lists for the Developmental Disability Services (DDSD) wait list and $8 million to increase provider reimbursement rates by 4 percent for doctors to care for those DDSD patients. The budget also provides funding to increase Medicaid provider reimbursement rates by 5 percent for doctors and healthcare facilities and funding to create an incentive reimbursement program for nursing homes that would improve health outcomes and quality of life for patients.

The State Auditor’s Office received a $700,000 increase to hire new auditors, and lawmakers approved $1.7 million to create a legislative-level budget office to give the House and Senate more resources to review agency budgets and analyze programs and services.

The budget also fully funds the Oklahoma Department of Transportation’s 8-Year Construction Work Plan to maintain and build new roads and bridges and provides an additional $30 million for the County Improvements for Roads and Bridges (CIRB) Program on top of their annual $120 million budget.

Lawmakers also provided a $3 million increase to the Rural Economic Action Plan (REAP) for economic development in rural communities, a $1 million increase for county extension offices and $19 million for the governor’s Quick Action Closing Fund, which helps attract new businesses to Oklahoma.

“House Republicans had several priorities at the start of the 2019 legislative session that we based on conversations we had with voters on the doorsteps during the summer,” said House Speaker Charles McCall, R-Atoka. “Those priorities included another teacher pay raise on top of the historic pay raise we provided last session, more money for the classroom on top of the large investment we made to public education last session, reestablishing our county infrastructure investment plan, more resources devoted toward rooting out waste and inefficiencies in government spending and increasing our savings to be better prepared for future economic downturns. We have accomplished all of those goals with this budget agreement.

“We believe increasing teacher pay directly addresses the teacher shortage by incentivizing new teachers into the classroom and keeping the veteran teachers we already have, and we think the nearly 1,200 new teachers we have hired since the previous pay raise reinforces that belief. We have provided nearly $640 million in new funding and increased the total common education budget by more than 26 percent during the last two years. We also prioritized funding for nursing homes, state employees and corrections officers and concurrent enrollment programs for high school seniors. This budget is an investment in Oklahoma, and I am very grateful for my colleagues in the House for getting this bill across the finish line.”

“I said last year to ‘not let the perfect be the enemy of the good,’ but this year I said to ‘not let the perfect be the enemy of the great’,” said House Appropriations and Budget Chairman Kevin Wallace, R-Wellston. “The Fiscal Year 2019 budget was the best budget that I had seen since I arrived in the House, and I believe the Fiscal Year 2020 budget is substantially better. This is a great budget, and it has a little bit of everything, including new funding to meet the needs of our most vital government agencies and a historic savings of surplus funds that will put future Legislatures in a much better financial position than we arrived in.”

House Bill 2765 passed out of the House by a vote of 76-23 and now heads to the Senate for consideration.