Budget package includes taxpayer rebates, reinstatement of 1.25% vehicle sales tax exemption | Govt-and-politics

OKLAHOMA CITY — The fiscal year 2023 budget agreement announced Monday night and launched on its legislative voyage Tuesday doesn’t include the big tax cuts floated earlier this session, but it does call for $75 and $150 rebates to taxpayers and reinstatement of a motor vehicle sales tax exemption.

House and Senate panels meeting separately but as the Joint Committee on Appropriations and Budget on Tuesday passed Senate Bill 1040, known as a general appropriations bill, and almost 30 associated measures that now go to the full House and Senate.

If all goes to schedule, legislative leaders plan to send the package to Gov. Kevin Stitt and conditionally adjourn this year’s annual session by Friday.

SB 1040 would authorize expenditures of a record $9.84 billion, of which $150.4 million is in supplemental and special appropriations not considered part of the regular FY ‘23 appropriations.

Regular FY 2023 appropriations would be $9.69 billion, a 9.7% increase over the current fiscal year’s.

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Neither figure includes $698 million set aside to lure an electric vehicle battery factory to the MidAmerica Industrial Park at Pryor. Lawmakers said that money is coming from excess current year funds and will be available for appropriation next year if the plant goes elsewhere.

Should the industrial park land the factory, the Grand River Dam Authority’s debt limit would rise from $1.4 billion to $2 billion to acquire additional generation and distribution capacity to handle the additional demand for electricity to accommodate it.

For many, the budget’s highlights are the rebates of $75 to individuals and $150 to joint filers, to be paid in December.

“For some people, that makes a real difference in their lives,” said Senate Appropriations Committee Chairman Roger Thompson, R-Okemah.

The one-time payments are less than the $125 and $250 first proposed and will come after the fall elections instead of before as originally scheduled. House staff estimates the total cost at $182 million, to be paid with general revenue left over from FY 2021.

According to a Senate estimate from earlier this year, reinstatement of the 1.25% percent vehicle sales tax exemption, which was removed during the budget crisis of 2017-18, would cost around $165.5 million a year in foregone revenue.

Buyers would still pay a 3.25% excise tax.

While those two adjustments total $347.5 million, the proposed budget does not include more ambitious tax cuts floated this year, among them eliminating or putting on hold a 4.5% state sales tax on groceries and a reduction in personal and corporate income tax rates.

A substantial portion of the $860 million in additional spending for FY ‘23 would go for state employee pay increases, including for Oklahoma Highway Patrol troopers and support personnel and Oklahoma State Bureau of Investigation agents.

The OHP also wants to add officers, with Thompson saying the state police force is about 400 below its authorized strength.

There are also substantial increases for courts, district attorneys and indigent defense, the Department of Environmental Quality and the Oklahoma Water Resources Board, the Attorney General’s Office and legislative operations.

Among areas not seeing much of an increase is common education, which had asked for almost $100 million in additional money and would be getting about $17 million — 0.54%.

“We know that we are $1.2 billion dollars behind the regional average in per-pupil investment,” said Sen. Carri Hicks, D-Oklahoma City. “This is the time we should be filling the gap.”

“I am mad about it,” said Sen. J.J. Dossett, D-Owasso.

He said there are no funds to reduce class sizes and retain teachers, something that needs to be addressed every year. He said the state can’t wait for another teacher strike.

Dossett said more from the growing surplus should be sent to common education.

Thompson said it is not wise to spend down to the last dollar knowing that the budget is propped up with federal dollars, with inflation rising and a war in Ukraine. The state needs $2.3 billion to $2.4 billion in savings, Thompson said.

He said the state’s reserves are expected to hit $2.6 billion next year.

Higher education, which has taken several large cuts in recent years, would get a 7.45% hike this year.

The agreement would increase the House’s appropriation by 18.78%, the Senate’s by 15.47% and the Legislative Service Bureau’s by 38.54%.

The Governor’s Office and the Oklahoma Ethics Commission would see no increase.

The agreement would give the Oklahoma Attorney General’s Office a 25.87% increase and again would earmark $10 million to fight “federal overreach.” House Appropriations and Budget Committee Chairman Kevin Wallace, R-Wellston, said most of the $10 million earmarked for the current budget year has been spent or encumbered.

The Department of Human Services would be getting $32.5 million to eliminate a waiting list for people with disabilities seeking home and community based services.

The Oklahoma Department of Mental Health and Substance Abuse Services would get 5.78% more, including $3.5 million to expand capacity at the Oklahoma Forensic Center, an inpatient behavioral health facility in Vinita, and $7 million for provider rate increases.