ONE service provided by Oklahoma’s multi-county grand jury and state auditor’s review of the Health Department’s finances is that it undermined a talking point too often blindly accepted as fact: That most, if not all, state agencies have been “cut to the bone.” The investigative audit report on the Health Department shows how that claim can rely on rhetorical sleight-of-hand.
The audit reveals, “Although the agency claimed that the current financial ‘crisis’ is due in part to decreasing revenues, that claim does not reflect the full picture.”
Auditors determined the money directly appropriated to the Health Department by the Legislature had been cut by $7 million between the 2011 and 2017 budget years, but those cuts were more than offset by $20 million in increased non-appropriated revenue during that same period.
“In summary, total agency revenues increased by $13 million and total overall expenditures increased by $15 million,” the audit revealed.
Claims of draconian cuts in state government often focus only on agency funds directly appropriated by the Legislature. Yet that funding accounts for only a share of total government spending. In addition to appropriations, there’s state funding that doesn’t go through the legislative appropriation process, along with fee revenue, federal funds, and local tax funding used by the state.
As a result, agencies receiving less in state appropriations can still see their overall budgets increase. The Health Department is not the only agency where that can occur. That’s why, despite claims of enormous spending reductions, the overall trajectory of Oklahoma government spending has continued to climb.
In a recent post, the conservative Oklahoma Council of Public Affairs notes, “In fiscal year 2008, total spending by Oklahoma’s state government was $15.02 billion. In fiscal year 2017, the most recent fiscal year for which full data are available, total state government spending in Oklahoma topped $17.53 billion.
“In other words, total state government spending in Oklahoma is $2.5 billion higher today than 10 years ago, an increase of 17 percent,” OCPA noted.
This year’s appropriation of $7.55 billion will not account for even half of total Oklahoma government spending.
State politicians’ practice of discussing only appropriations while mostly ignoring total state spending has stoked public confusion and fostered a lack of serious oversight (as occurred at the Health Department).
Kevin Stitt, a Republican candidate for governor, notes that state reports can’t even agree on total funding figures.
“On Oklahoma’s current state website, it displays in big bold font that state government spent $30.3 billion in Fiscal Year 2017, yet the Comprehensive Annual Financial Report says Oklahoma spent $17 billion, a number nearly half the size,” Stitt said. “What are Oklahomans to believe?”
The Step Up Oklahoma plan proposed this year endorsed tax increases but also called for reforming the budget process to reflect total state spending. The latter reform is still much needed.
For too long, the legislative budget process has been based on figures that are technically accurate but fundamentally misleading. That might be good for generating hype and a “crisis” mentality, but it’s proven to be a poor way to run a state.