Oklahoma lawmakers approve $12.59 billion budget with tax cuts, flat agency funding

State lawmakers on Wednesday finalized the fiscal year 2026 budget, which totals $12.59 billion, a 0.5% increase over the 2025 budget. Despite agencies requesting more than $13 billion collectively, most will see flat funding levels.

Tax Cuts Included

The new budget includes a tax cut for all Oklahomans. Lawmakers eliminated the bottom three income brackets and approved a quarter-point cut for remaining taxpayers.

“Giving some relief to Oklahoma and staying up with the competition, and what other states around us are doing so we can be the most pro-business friendly state and getting us on a path to zero,” said Gov. Kevin Stitt. “We've come up with an agreement on that.”

Savings and Mental Health Funding

Lawmakers are setting aside $3.5 billion in savings.

A key sticking point in budget negotiations had been funding for mental health. The Oklahoma Department of Mental Health and Substance Abuse Services will receive $27 million this year—an amount that will remain the same next year. Lawmakers say they will reevaluate funding after the ongoing investigation into the agency is completed.

Chambers Claim Bipartisan Intent

Legislative leaders emphasized that the final agreement was not tailored to one chamber over the other.

“What can we do to make things better for the state of Oklahoma?” said House Speaker Kyle Hilbert. “And I think you've seen a culmination of that throughout this session. That doesn't mean we haven't had disagreements—we certainly have.”

Criticism From Senate Democrats

Senate Democrats argued the budget does not prioritize the needs of Oklahoma residents.

What wasn't in the budget

A key part that was not in the budget was the State Department of Education's $3 million request to put Bibles in Oklahoma public schools.