The Oklahoma House and Senate's budgets are wildly different — to the tune of about $1 billion

Republican leaders in the Oklahoma House of Representatives revealed their budget plan recently — a proposal that’s about $1 billion different from the plan released earlier by the Oklahoma Senate.

The announcement ended a two-week stalemate between the House and the Senate leaders over next year’s budget. Last December, Senate President Pro Tempore Greg Treat announced a new budget transparency initiative. That initiative, the Senate leader said, would make the spending process open and, in the end, help create a better budget.

On Tuesday, House Speaker Charles McCall and budget Chairman Kevin Wallace released the House's budget proposal and an online portal in order to be able to track the budget in real time. While neither McCall nor Wallace said why the plan was delayed, both men — echoing Treat — touted their chamber's commitment to budget transparency.

“When I came in as speaker, that was probably the biggest criticism from our caucus,” McCall said at the news conference announcing the plan. “We had criticism from the public that they thought the processes were too closed and they would want to see them opened up. So, this has been an eight-year evolution for the House of Representatives.”

Thursday, Treat said he was excited the House had joined the budget transparency effort.

"Very excited that the House joined the effort in trying to get some numbers out there and follow, honestly the Senate lead and getting transparency going this week," he said. "They released their budget on Tuesday and it was the first time we saw it, as well. And it's the first time our members have seen it."

Treat said the new system would move the state forward. "To the best of my knowledge this is the first time in state history where everyone's numbers are public at this stage of the game," he said. "Oklahoma wins in the process."

A billion here, a billion there and, maybe, another tax cut

A close look at both proposals shows the difference between the plan totals roughly $1 billion.

The House’s plan would allocate $12.63 billion for FY 2025. The Senate plan would earmark $13.70 billion. In both plans, Oklahoma’s education system remains the largest budget item, with roughly a $5 billion price tag.

In some areas, both plans are closely aligned. In other areas, the differences are large.

While Treat has said the Senate would not hear legislation that reduced the personal income tax, that’s not the case in the House. The House's budget plan incudes a personal income tax cut. Under the House plan, the personal income tax rate would be reduced by .25%. That cut would cost about $96 million for FY 2025 and more than $230 million in FY 2026 and beyond.

More: Budget standoff at Oklahoma Legislature drags on for second week

And though McCall and Gov. Kevin Stitt have both said they want a tax cut to return more back to Oklahomans, an analysis of the House proposal shows the average Oklahoman wouldn't get much money back.

Travis Roach, associate professor and chairperson of the Department of Economics at the University of Central Oklahoma, said the speaker’s tax cut bill does almost nothing for the average Oklahoman.

"So, if you look at how much people earn … if we look at (the) breakdowns, percentile, the median in Oklahoma makes about $40,000 a year. And so, the tax cuts he’s proposed save that person about $11 a month, which means 50% of our population would hardly notice this tax decrease,” Roach said.

Even if the cut goes up to the 90th percentile, which is the last metric shown in the data, that translates to about $20 a month, Roach said.

"This is a tax cut. Yes, it would be across the board. But unless you’re making well over $100,000, $200,000, in the top 10% of all incomes, that’s when it starts meaningfully changing your life,” he said. "And so, what we’re doing is leveraging future tax dollars, which could go to quality of life improvements, like better funding for our schools, like increasing tourism by investing in our state parks or our railways, basic quality of life things. We’re giving up that tax money to offer a tax cut really to about 10% of Oklahoma.”

Instead, Roach suggested putting a cap on this tax cut to “make it just for anyone earning less than $100,000 and leave the cut the same for anyone making more.”

"If you do that, you take the expenditure on this tax bill from what’s estimated to be about $360 million per year down to $80-100 million a year," he said. "So you cut the deficit from what it would have been and you affect well over 90% of Oklahoma. If you’re earning $200,000, I don’t believe you need a tax cut, especially when it comes at the expense of some of those quality of life improvements we talked about."

Treat said the Senate does support a reduction in the personal income tax cut, but "just not at this time."

"We delivered one just two years ago," he said. He said the Senate's GOP caucus believes the state can afford the cut to the state's portion of the grocery sales tax, but can't fund both a grocery tax cut and a personal income tax cut today.

"That's truly what we believe we can afford and have a sustainable budget moving forward without jeopardizing the future of Oklahoma," he said.

Money for public health

Though the House and Senate's budget proposals vary greatly in some areas, they are close in funding for public health agencies. Last year, the Legislature allocated $2.34 billion for the state's public health system. This year, budget requests for the system totaled about $2.41 billion. For FY 2025, the House's budget would allocate $2.20 billion, while the Senate would earmark $2.21 billion.

The Oklahoma Health Care Authority — the agency that administers Medicaid in the state — would see its budget reduced under proposals from both chambers. Last year lawmakers allocated $1.49 billion for the authority. This year, the House proposal would cut that to $1.33 billion while the Senate would spent $1.31 billion.

Both chambers would earmark a small increase for the Oklahoma State Department of Health over its $71.49 million appropriation last year. The Senate, $74.52 million. The House, $82.59 million.

Transportation, roads and other disagreements

Despite requesting almost $1.5 billion for FY 2025, Oklahoma's transportation system — space industry development, aeronautics and the Oklahoma Department of Transportation, itself — would see a budget between $850 million and $890 million under proposals from the House and Senate. The Senate's proposed budget would earmark $849.15 million to the system, while the House would allocate $884.95 million.

Last year the agency received $813.05 million.

With time running out before the Legislature is required to adjourn, work — and arguments — on the budget will increase tenfold. Treat said both chambers also had agreed to a provision that when an agreement is reached on a line-item, it wouldn't be renegotiated.

"In years past, when we've had an agreement on a line item ... but then disagreed on something later in the budget that (the agreed on line-item) gets wiped out," he said. "The big advancement is we have an agreement with the House, if we have numbers that align on the spreadsheet, we're not negotiating those. Those are in. We're checking the box and moving on down the road. That is a huge accomplishment."

More: What is at the root of the state budget impasse between the Oklahoma House and Senate?

And while Treat said he respected and applauded the House for their new push for budget transparency, he acknowledged, too, the gamesmanship involved in the process.

"We're bringing them closer to the transparency that we all desire," he said. "I applaud them trying to get to some sense of transparency."

As an example, he pointed to earlier complaints from the House about a $20 million problem in education funding. He said that example was simply a red herring used by House leaders to buy themselves more time to develop and launch their budget portral.

"I sat here a week or two ago and told you I thought the teacher pay deal was a red herring — that we had to finish the FY 24 before we finished FY 25," he said. "We've not had a JCAB (Joint Calendar for Appropriations & Budget) meeting to solve that issue. So they were buying time to get this together. I knew that. We knew that. But it takes two to tango, and we're working on the budget together and we respect that part of the process."

Still, Treat said, the Legislature was ahead of schedule in crafting a budget.

"We're way ahead of the game," he said. "We normally have the fights and blow-ups we had a week or two ago, toward the end of April. If you want to measure, measure when the fights start and they normally start toward the third or fourth week in April. I know it's uncomfortable for some people. I don't run away from controversy. I run to it, and we needed to force that to be able to start having productive conversations."

This article originally appeared on Oklahoman: A closer look at the Oklahoma House and Senate budgets