Oklahoma governor, GOP lawmakers reach $12.6B budget deal

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OKLAHOMA CITY — Oklahoma Gov. Kevin Stitt and state lawmakers have reached an agreement on a $12.59 billion budget deal for FY 2026.

Stitt said the goals of the plan are to invest in key infrastructure, strengthen Oklahoma’s business climate and cut the income tax.

GOP leaders and Stitt announced the deal Wednesday afternoon, which includes a quarter-point income tax reduction and a trigger. The bottom three brackets will be eliminated.

The state savings account will be reduced from $5 billion to $3.5 billion.

House Speaker Kyle Hilbert, R-Bristow, expressed confidence in the budget. He said the state is prepared for the future.

Hilbert highlighted a $200 million investment in the OU pediatric heart hospital in Oklahoma City and $250 million for a state-of-the-art veterinary hospital at Oklahoma State University in Stillwater.

OSU A&M Board of Regents Chairman Jimmy Harrel said the $250 million investment powerfully answers the call to build their new teaching facility. The facility will serve the state for at least the next 40 years, he said in a statement following the announcement.

The State Department of Education will receive the largest appropriation for FY 2026 at $3.98 billion.

Lawmakers earmarked $312 million to purchase the Lawton Correctional and Rehabilitative Facility from the GEO Group and $27 million for a FY 2025 supplemental for the Oklahoma Department of Mental Health and Substance Abuse Services.

Stitt said he’s excited about policies that will help Oklahoma become the most “business-friendly state,” referencing behind-the-meter legislation that allows companies to build their own power generation and the new business court system, which he called for in his State-of-the-State Address in 2024.

“We need more electricity generation done in the state of Oklahoma so we’re able to get that accomplished. And we’re setting up business courts to make sure businesses have assurance and certainty,” Stitt said, noting the desire to pull business away from Delaware, where the first of such systems was established.

Senate Pro Tem Lonnie Paxton, R-Tuttle, said the budget plan delivers meaningful tax relief, reforming the complicated tax code and makes critical investments in the state’s future.

If the budget is approved by the House and Senate, Paxton said they will deliver tax cuts that will return money to Oklahomans and create a more competitive tax climate for job creators.

“We will also implement key worker’s comp and tort reform measures that will reduce frivolous lawsuits and make Oklahoma a more attractive place to do business,” Paxton said. “These are common-sense changes that help level the playing field and encourage growth, innovation and investments across our economy.”

Senate Minority Leader Julia Kirt, D-Oklahoma City, criticized a lack of transparency and details about the budget. She also questioned the impact of a $300-$500 million tax cut on public services.

“What I hear from people is that they want to see better public schools, more access to health and strong infrastructure, and if we’re cutting $500 million out of the budget, I want to see where that’s coming from,” Kirt said after the announcement.

Kirt said Democrats weren’t a part of the conversation, and GOP lawmakers and Stitt prioritized big-business giveaways and making operations easier for corporations without considering the people who work for those companies.

“We are talking about more than 650,000 people that we represent, and their voices weren’t heard in these final processes, and that’s deeply troubling,” Kirt said.

The budget will now be considered by Joint Committee on Appropriations and Budget.