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Tax Commission seeks $34.2M for FY26; director outlines reforms, Parental Choice transition and backlog cuts
Summary
Oklahoma Tax Commission Executive Director Doug Linehan told the Senate appropriations subcommittee the agency requests $34.2 million in appropriations for FY26 and described technology, customer-service and collections reforms, a planned internal takeover of the Parental Choice Tax Credit front end, and reductions in refund/credit backlogs.
Doug Linehan, Executive Director of the Oklahoma Tax Commission, told the Senate Appropriations Subcommittee on General Government and Transportation that the agency’s FY26 operating appropriation request is $34,200,000. Linehan described a multi-year program of operational changes that he said are intended to improve taxpayer service, reduce backlogs and shrink reliance on outside contractors.
Linehan said the Tax Commission’s operating budget is roughly $100 million in total and that the FY26 request represents a reduction compared with past requests ($35.2M requested in the prior year). He summarized recent accomplishments, including a new centrally assessed ad valorem system, a collections system that the agency says increased “no-touch” collections and produced roughly $12 million in additional no-touch collections in the first year, and a decrease in the business tax credits and refunds backlog from about 17,000 to below 8,000.
On the Parental Choice Tax Credit program, Linehan explained that the agency paid a third‑party vendor about $3.9 million for front-end services in the program’s first year. The agency plans to bring front‑end processing and contact-center services in-house; Linehan said this year’s front‑end and contact-center costs will be roughly $3.8 million, with an expectation that once built internally the ongoing annual operating cost will fall to about $2.0 million.
Linehan discussed workforce and compensation changes inside the agency: he said the commission has about 600 employees, reduced turnover from over 30% to about 11%, implemented an agency-wide performance management process, and applied a broad compensation adjustment that affected about 87% of employees with an average adjustment of about 14% to move closer to market medians.
On finance and reserves, Linehan said unrestricted cash and revolving-fund balances have grown from about $40 million in 2022 to about $72 million; he described revenue growth partly from increased collections and audit recoveries (audit revenue reportedly up about 35%). He said the agency’s cash balance and audit performance allowed investments in IT, contact-center upgrades (Taxpayer Resource Center), and modernization of the OKTAP electronic filing platform.
Committee members pressed on specific items. Senator Guthrie asked about the outside collection fee the statute allows; Linehan said collection agencies that handle older, hard-to-collect accounts can charge up to about 27.5% and that fee is passed to the taxpayer by statute. Senator Standridge asked whether the Parental Choice transition will reduce future costs; Linehan said the agency expects lower operating costs after the internal build and that detailed transparency will be provided in budget materials.
Linehan emphasized accountability and customer service. “That hundred million dollar budget, that’s your money. I owe it to you to use that money as fiscally responsible as possible,” he told the committee. He stood for questions after a roughly hour‑long presentation and described several upcoming deliverables, including a February 18 deadline for Parental Choice applications and further TRC implementation milestones.
