1. Budget Update for Oklahoma ASBO April 26, 2018
Pam Deering
CCOSA/OASA
Shawn Hime
OSSBA

2. Funding: 2019 Appropriation Bill
SB 1600 is the appropriations bill for FY It appropriates $2.9 billion to Common Education -- a $480.8 Million increase.
It represents a 19% increase in appropriations and includes funding for the teacher and support employee pay raise,
$33 million for textbooks/instructional materials and
Restoration of FY 18’s $17 million funding cut.
Fully funds the Ad Valorem Reimbursement Fund at $92.7M

3. FY 19 Education Appropriations
SB 1600
GR Financial Support of Schools
1,373,201,301.00
Ed Reform Revolving Fund
818,166,976.00
Common Ed Tech Fund
50,470,751.00
Mineral Leasing Fund
2,850,000.00
Mineral Leasing Fund ‘17
210,984.00
Ok Ed Lottery Trust Fund
30,326,735.00
Lottery Trust Fund 2017
1,985,638.00
Public School Activity Fund
91,319,026.00
Textbooks & Instructional Materials
33,000,000.00
Certified FBA
315,478,030.00
Support FBA
171,905,086.00
State Department of Education
15,980,190.00
School Consolidation Assistance Fund
3,369,637.00
School Consolidation Fund 2017
220,626.00
TRS
TRS 2017
Total
2,912,075,243.00

4. Teacher & Support Pay Raise Bills
HB1023xx is the $353.5 million teacher pay raise bill. It will go into effect with the school year and is a permanent raise for teachers. The bill:
Funds an average $6,100 teacher pay raise -- the largest teacher pay raise in state history.
Increases the minimum salary schedule by at least $5,000 at every level.
Provides larger raises for more experienced teachers, including a $7,700 increase to the minimum salary schedule for a teacher with 25 years of experience.
Requires school districts to give the pay increase to teachers even if the district currently pays above the state minimum.
HB1026xx -- the $52 million support employee pay raise bill that guarantees each support employee a $1,250 raise.

5. New Revenue Bills
HB 1010xx is the major revenue bill expected to generate more than $428.4 million from the following sources:
Increase in the gross production tax (GPT) from 2 to 5 percent
$1-a-pack cigarette tax
3-cent gas/6-cent diesel tax
HB 1011xx caps itemized deductions and is projected to net an additional $94 million in revenue for FY19.
HB 1019xx is the online sales tax bill. It earmarks revenue of right at $19.9 million annually for the Education Reform Revolving (1017) Fund.
HB 3375 is the ball-and-dice gaming expansion projected to net about $24 million annually.

6. New Revenue*
Bill New Revenue Annualized Amount HB 1010xx Oil & Gas Taxes $170,485,000 HB 1010xx Motor Fuel Tax $104,963,000 HB 1010xx Tobacco Taxes $153,028,000 HB 1011xx Income Tax Exemptions $ 94,015,000 HB 1019xx 3rd Party Online Sales Tax $ 19,600,000 HB 3375 Gaming Ball & Dice $ 24,000,000 Total $566,111,000 *Oklahoma Tax Commission

7. New Expenditures Bill New Expenditures Amount
HB 1023xx Teacher Pay Raise $ 353,501,793
HB 1024xx State Employee Pay Raise $ 63,765,398
HB 1026xx Support Employee Pay Raise $ 52,000,000
Total $ 469,267,191

8. Additional Expenditures…
Bill Expenditures Amount
SB Textbooks $ 33,000,000 increase
SB State Aid Formula $ 17,000,000 increase
SB Flex Benefit Amount $ 24,600,000 increase

9. Distribution of Education Expenditures…
State Aid: Projection for budgeting is to use $366 per WADM as an increase to the factor
Textbooks: Projection to use approx. $49.00 per ADA for textbook allocation based on current statewide ADA — will change as ADA numbers are updated
Revenue is in the state aid formula for teacher and support employee raises and operations while textbook money is outside the formula

10. School District Budget Considerations
Consider your Temporary Appropriation and the increase in expenditures with the pay raises to ensure that you don’t exceed the appropriation when you encumber your payroll.

11. What is the Veto Referendum?
Oklahoma Tax Payers Unite (Tom Coburn)
Possible initiative to overturn any tax increase
Authorized by the Oklahoma Constitution (Article V, Section 3)
Possible challenge of HB1010xx Revenue Bill
Waiting to see initiative petition language

12. What is the Veto Referendum? Cont…
Many questions about the effects on:
-Teacher Pay Raise—HB 1023xx, Effective August 1
-State Employee Pay Raise—HB 1024xx
--Support Staff Pay Raise—HB 1026xx
Legal questions around the effective dates of the legislation and the signed petition for revenue collection
Legal questions around teacher contracts and implementation of teacher pay raise
Legal questions around the possible loss of GR revenue to support the appropriations in HB3705
Concerns for other state agency budgets and the effect if revenue is lost

13. Questions???