‘I Lose A Lot Of Sleep’: Oklahoma Lawmakers Brace For Revenue Losses, Budget Cuts

Oklahoma lawmakers will have to navigate another challenging budget year in the upcoming legislative session. 

“I lose a lot of sleep at night worrying about the budget,” said Sen. Roger Thompson, Chairman of the Senate Appropriations Committee. He said the state could dip back into state savings accounts or make budget cuts for Fiscal Year 2022.  

“It’s going to be a very difficult year for us,” said the Republican from Okemah. “There has to be a balanced budget.” 

Last week, the Oklahoma Tax Commission reported a recent Supreme Court ruling could cost the state hundreds of millions in tax revenue. 

In McGirt v. Oklahoma, the Supreme Court reaffirmed boundaries of the Muscogee (Creek) Nation, one of five federally recognized Native American tribes in the state. 

The ruling focused primarily on criminal prosecution and jurisdictional issues between the U.S. and the tribe, but also allows for tribal members to become exempt from paying state income and sales tax. 

The OTC estimates annual losses to income, sales and use taxes could reach nearly $60 million. If the ruling is applied to all five tribes, the state could lose more than $200 million each year. 

“Oklahoma could soon be short hundreds of millions of dollars in tax revenue,” Gov. Kevin Stitt said in a statement. “Which would further exacerbate our state’s current budget challenges and force difficult decisions regarding the core services Oklahomans rely on regardless of their race, gender or tribal affiliation.” 

“I think this is a huge deal,” Thompson said, adding that Oklahoma’s savings accounts are currently worth about $215 million after withdraws from last year’s budget. 

In addition to the expected losses, lawmakers must find money for Medicaid expansion, which voters added to the state constitution in July. It will cost Oklahoma between $164 – 246 million, according to Thompson. 

“Last year, we cut on average 3.95% for the $1.3 billion deficit. We could be looking at a similar cut again this year, just across the board,” Thompson said. 

Rep. Mark McBride (R, Moore) is the House Assistant Floor Leader, the Chair of the and a member of the House Budget Committee. He said fully funding education will be a priority, but it’s too soon to say what areas of the budget could be under the microscope for possible cuts. 

“We may not have such a good year next year, but we'll get through it,” McBride said. “It’s what we do here in Oklahoma.”