July 1 marked the end of one fiscal year and the start of another, which means the state budget passed this legislative session is now in effect. State revenues over the past year surpassed projections, signaling strong economic growth. That growth comes on the heels of the Legislature’s passage last year of the largest tax cut in state history. It’s been nearly a year since the elimination of the state portion of the grocery tax took effect to help all Oklahomans save more at the grocery store. This year, the Legislature built on that tax cut with a 0.25% reduction in the state income tax, although that cut won’t take effect until tax year 2026 begins in January.
As the Senate’s Appropriations chairman, I’ve received questions about how the federal “Big, Beautiful Bill” will impact Oklahoma. Since President Trump signed it into law, the Senate’s fiscal staff and I have been evaluating how it could affect the state’s budget. This legislation was vital to preserving the historic tax cuts championed by President Trump in his first term, which fueled economic growth and allowed Americans to keep more of their hard-earned money. Without this bill, those cuts would have expired, triggering a massive, across-the-board tax hike. The bill also provides critical funding for strong border enforcement and invests in national defense.
My team and I have been in close contact with Oklahoma’s federal delegation while working through the details of this more than 800-page bill. We know it will gradually shift more of the costs of several entitlement programs, including Medicaid and the Supplemental Nutrition Assistance Program, to the state. Notably, it imposes new work requirements on able-bodied adults who receive these benefits. I see this as a positive step that will help more Oklahomans return to the workforce and strengthen our economy. However, early estimates show the state may have to cover about 25% more SNAP costs and pick up new administrative expenses, which could amount to about $357 million annually. State leaders are already taking steps to ensure SNAP benefits aren’t being used to buy junk food and making sure taxpayer dollars support healthy, nutritious meals.
Meanwhile, the new Medicaid work requirements mean the state must fund a system to track compliance, which could cost the state millions in staffing and technology infrastructure. I’ve heard concerns that the “Big, Beautiful Bill” could hurt funding for local hospitals because of the Medicaid changes and a reduction in state-directed payments that allow states to increase hospital reimbursement rates through the Supplemental Hospital Offset Payment Program. Fortunately, these SHOPP reforms won’t take effect for several years, which will give the Legislature time to work with hospitals and our federal partners to prepare. The bill also includes a $50 billion fund to protect rural hospitals, which will appropriate $10 billion to rural hospitals each year for five years. I’ll have more insights to share once my team and I have had more time to review the bill.
As always, it’s an honor and a privilege to serve the people of Senate District 20.
Please feel free to contact my Capitol office with any questions or concerns you may have about legislation or other issues impacting our state at 405-521-5628 or at Chuck.Hall@oksenate.gov.
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