State Board of Equalization sets FY26 appropriation limit, certifies revenues and finds roads and lottery funds enhanced

The State Board of Equalization on Feb. 14, 2025 set the fiscal-year 2026 limit on appropriations at $15,683,774,798 and certified statewide revenue estimates and related findings the legislature needs to draft a balanced FY26 budget.

The actions, taken unanimously by roll call, included separate findings that the roads fund “enhanced transportation funding” for FY2025 and that appropriations from the Oklahoma Education Lottery Trust Fund enhanced education funding in FY2025. The board also certified 5‑year averages for several tax collections used in state apportionments, established a new baseline for Teachers Retirement System apportionments and certified the total authority the legislature may appropriate from certified funds.

The certifications are required by state law and the Oklahoma Constitution so the Legislature can draft a balanced budget. Mr. Gilbert, a staff member who presented the materials to the board, told members that Article 10, Section 23 of the Oklahoma Constitution requires the board to meet after the annual apportionment and that the board may adjust certifications “based on the most current information available and appropriations.”

On the spending ceiling (Schedule 1), staff explained the board applies a year‑over‑year 12% growth allowance plus an inflation factor. The statutory inflation measure used is the 12‑month Consumer Price Index from the Bureau of Labor Statistics; staff said that number for the current calculation is 2.9 percent, producing a combined ceiling increase of 14.9 percent. The board approved the FY26 appropriation limit by voice/roll call, with the recorded roll showing Miss Recker, Mister Russ, Miss Byrd, Lieutenant Governor Pinnell and Governor Stitt voting aye.

On the roads fund (agenda item 6), presenters reviewed Oklahoma Department of Transportation (ODOT) appropriations and said they removed roads‑specific supplements and certain retro or supplemental funds to calculate a base. Staff reported that ODOT’s non‑roads base appropriations increased from FY24 to FY25, and therefore any roads fund amounts are considered additive or “enhancing.” The board moved and approved the finding that the roads fund enhanced transportation funding for FY2025. Presenters noted the roads fund is capped by statute at $590,000,000 per year.

The board next reviewed lottery proceeds (agenda item 7). Staff explained the process of removing supplementals to arrive at an education funding base and reported that education base appropriations increased by about $116 million (2.4 percent) from FY24 to FY25, which the staff said demonstrates enhancement rather than supplanting. Staff further noted a statutory change that limits direct annual lottery transfers to $65,000,000; amounts above that cap are directed to a new Teacher Empowerment Revolving Fund at the State Department of Education without annual appropriation. The board unanimously approved the board finding that lottery appropriations enhanced education funding in FY2025.

On tax apportionments and 5‑year averages (agenda item 8), the board certified the five‑year averages used to apportion certain taxes to the general revenue fund. The board certified the five‑year averages shown in the materials as: $348,156,954 for the oil gross production portion apportioned to general revenue; $452,700,994 for natural gas; and $469,990,301 for corporate income tax portions. The board approved each certification by roll call.

The Teachers Retirement System (agenda item 9) received two related actions. Staff reported the five‑year apportionment average that sets the new baseline for the Teacher Retirement System revolving fund is $386,623,592; staff said FY26 projected collections for that fund exceed the new baseline. The board also certified the component five‑year apportionments that make up that baseline as: $190,173,189 from personal income tax collections, $31,411,057 from corporate income tax collections, $140,192,774 from sales tax collections, and $24,846,572 from use tax collections. The board approved those motions by roll call.

For overall revenue certification (agenda item 10), staff described the certified funds and the distinction between certified statewide funds subject to board certification and other agency revolving or federal funds that require separate legislative authorization. The board certified a proposed expenditure authority (the number the board sends to the Legislature) of $8,273,961,689 for the certified funds; the motion the board approved also referenced a total estimate summation of certified funds and a separate federal certified revenue total as described in the meeting materials. Presenters and members discussed that the Oklahoma Tax Commission and other estimating agencies supply the revenue estimates to OMES and that the February meeting includes additional months of collections data beyond the December estimate, improving accuracy.

Marie Schugel of the Oklahoma Tax Commission explained the commission’s estimation process: “When we're selecting our estimates, we work with two outside economists … and we selected the baseline to be most conservative,” aligning those professional forecasts with actual collections data. The state treasurer (name not specified in the transcript) described recent momentum in receipts and interest income, saying the current environment is “fantastic” compared with recent low‑rate years and noted portfolio duration practices that affect interest income expectations.

All motions discussed above passed on roll call. The meeting adjourned with the board scheduling a statutory follow‑up review in June to incorporate any law changes during the legislative session and to finalize FY26 work as required by constitutional timing.

Votes at a glance - Agenda item 5 — Set appropriation limit for FY26 at $15,683,774,798. Motion: text recorded in minutes; mover and seconder not specified on the public transcript. Roll call recorded ayes from Miss Recker, Mister Russ, Miss Byrd, Lieutenant Governor Pinnell and Governor Stitt. Outcome: approved. - Agenda item 6 — Finding that the roads fund enhanced transportation funding for FY2025. Motion: text recorded in minutes; mover/second not specified. Roll call recorded ayes from Miss Arthur, Mister Russ, Miss Berg, Lieutenant Governor Pinnell and Governor Stitt (transcript shows unanimous approval). Outcome: approved. - Agenda item 7 — Finding that appropriations from the Oklahoma Education Lottery Trust Fund enhanced education funding for FY2025. Motion: text recorded in minutes; mover/second not specified. Roll call recorded ayes from Miss Arthur, Mister Russ, Miss Byrd, Lieutenant Governor Pinnell and Governor Stitt. Outcome: approved. - Agenda item 8 — Three certifications of five‑year averages for tax apportionments: oil ($348,156,954), natural gas ($452,700,994) and corporate tax portions ($469,990,301). Each motion approved by roll call; mover/second not specified. Outcome: approved. - Agenda item 9 — (1) New five‑year apportionment baseline for Teachers Retirement System set at $386,623,592; (2) individual five‑year apportionment amounts certified as personal income $190,173,189; corporate income $31,411,057; sales tax $140,192,774; use tax $24,846,572. Motions approved by roll call; mover/second not specified. Outcome: approved. - Agenda item 10 — Certification of FY26 revenue from certified funds and the proposed expenditure authority. The board approved certification of the proposed authority listed in the materials as $8,273,961,689 for certified funds and recorded totals for certified funds and certified federal revenue in the motion the board approved; mover/second not specified. Outcome: approved.

Clarifying details - Spending ceiling: statutory base allows a 12% increase plus the 12‑month CPI (presented as 2.9%), yielding a 14.9% potential ceiling increase year over year. - Roads fund cap: $590,000,000 annually (statutory cap described by staff). - Lottery trust fund: direct annual appropriation to education now capped at $65,000,000; amounts above that cap are directed to the Teacher Empowerment Revolving Fund at the State Department of Education without annual appropriation, per materials presented. - Teachers Retirement baseline: new 5‑year apportionment baseline $386,623,592; FY26 projected collections for the Teachers Retirement System were shown in materials as higher than the baseline. - Certified expenditure authority: $8,273,961,689 (the number presented as the proposed expenditure authority for the Legislature in the board materials).

Next steps and context The board will reconvene in June to review legislative changes made during the session and to finalize any adjustments to FY26 certifications. The certified numbers and findings are the technical inputs the Legislature uses to prepare appropriation bills and to meet the state’s constitutional balanced‑budget requirement.