Rep. Murphey: The best resource for studying state spending

Rep. Murphey: The best resource for studying state spending

Every so often, I field this question from those who are interested in state government: “How can I see state finances?”


It’s a query I really appreciate. Simply by asking the question, the person sends the message that he does not intend to judge state budget issues according to media sound bites or political press releases. He is willing to take the time to figure it out for himself.

Here is a fact realized by only a few: most state spending never goes through the Legislature’s appropriation process. In reality, the Legislature appropriates just a fraction of total state spend.

With that in mind, I refer the questioner to the follow resource: Oklahoma Comprehensive Annual Financial Reports, or CAFRs. The newest version was just released last week.

The CAFR imparts the most comprehensive resource for understanding all state spending (revenue and debt), because it includes the many billions of “non appropriated” state government spend.

This emphasizes the importance of looking at all state spending instead of just the appropriated money.

Most mistakenly refer to the appropriated money as the “state budget”, but that is not the case.

When the media and politicians talk about a “budget shortfall”, they are referring to the amount of money appropriated by the Legislature. They are not talking about overall state spending. This tends to mislead the public into thinking there is a “shortfall” when in fact, state government spending is at a record high level.

Even in years when the Legislature has less money to appropriate, the size of state government spending may continue to grow.

During 2017, for what may be the first time in recent history, overall state spending finally fell back from record levels; however, revenues continue to grow and it appears as if the state is likely on course to return to all-time-high levels of spending during the next year.

Because of this new money, not only will total state spending likely continue to set records, but the state appropriations could also easily return to an all-time-high position as soon as May of this year.

It is important to note that CAFRs provide much more than just spend analysis. After reading through these documents, the reader will quickly realize the state’s enormous dependence upon funds from the federal government. It is easy to see how the actions of state officials are contributing to the federal deficits and the growing federal debt — a debt which will have great consequence in future years.

The statements also include a breakdown by category of the amounts generated from each form of state taxation. Each category of taxation contains a decade in review. The reader can use this tool to analyze the ebb and flow of tax revenues over the last ten years.

The discerning reader will determine that state tax collections do not necessarily rise when the Legislature increases a tax. In at least one category, it appears that collections actually fell after one of the increases, even though the Legislature had designed their “budget” based on a projected increase in collections.

History has a way of repeating itself and this should serve as a clear warning to those state officials who are constantly calling for tax increases. History shows that tax increases do not always guarantee new revenue.

You will find a listing of all recent CAFRs with a Google search for “Oklahoma CAFR.”

Jason Murphey

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