Oklahoma's fiscal health improves
(The Center Square) - Oklahoma went from a budget deficit of $2.4 billion to a surplus of over $5 billion in one year, a new report shows.
The improvement in the state's financial health was primarily a result of federal COVID stimulus money and pension plan investment returns, which means the state's future financial stability will depend on sound financial decisions from the legislature, the report said.
The Financial State of the States report, which is compiled by financial watchdog Truth in Accounting, analyzes the assets and liabilities of all 50 states using data from annual comprehensive financial reports and ranks states based on their fiscal health.
It also looks at unreported liabilities to get a full picture of how well state governments are balancing their budgets and making sound financial decisions.
Oklahoma had a $5.7 billion surplus following fiscal year 2021, which broke down to a surplus of $5,200 for each taxpayer, according to the report. It was a stark contrast to its financial position after 2020, when the state had a taxpayer burden of $2,300 per taxpayer.
Overall, Oklahoma had $17.6 billion available to pay $11.9 billion worth of bills, including public employees' retirement plans, leaving it with billions more in surplus.
COVID relief funds boosted many states' scores and the authors warned against state governments getting comfortable with those numbers as pandemic relief money goes away.
"It is expected this report will look different next year when the investment markets decrease and discontinued federal funds are reflected in Oklahoma's annual statements," the authors wrote. "The situation could worsen further if the Oklahoma legislature assumes there are extra funds available and spends money based on transitory increases."
Oklahoma ranked 10th out of the 50 states with a "B" grade for its financial health, a jump up from the 19th position in last year's report when it received a "C." States receive a "B" if they have a taxpayer surplus between $100 and $10,000. A "C" grade means the state has a taxpayer burden of up to $4,900 per taxpayer.
The state's surplus included increases in the market value of public employees' retirement plan assets, which experienced an unrealized return of more than 28 percent, the report said.
Last year's report labeled Oklahoma a "Sinkhole State," meaning it didn't have enough funds to pay its bills. This year it was one of 19 states that were able to cover all their bills, winning them the title of "Sunshine State."