New State Revenue Estimates Are Met With Caution
Oklahoma’s Board of Equalization says incoming lawmakers may have roughly $612 million more to spend in fiscal year 2020, which begins in July. That would be an increase of 8 percent compared to 2019, but the estimates don't reflect sliding oil prices.
Shelley Zumwalt, a spokesperson for the Office of Management and Enterprise Services, says the increased gross production tax, or GPT, on oil and gas led an increase in general revenue collections. GPT collections for November were 121.6 percent higher than expected and 237.7 percent above the prior year.
“A bigger portion of our budget in 2020 is built on revenue from GPT than it was in 2019,” Zumwalt noted. “So even though we will have more revenue, we've put ourselves in a little bit more of a vulnerable place.”
Zumwalt says GPT revenue made up about 6.5 percent of general revenue in 2019, whereas it’s projected to make up more than 11 percent in 2020. The revenue numbers will be revised in February, before the legislature crafts a budget. And Zumwalt says collections are expected to drop between now and then.
“The estimate for this year the estimate that we just released has not factored in the most recent lagging oil prices.It usually takes about two months to see the effect and the general revenue fund,” Zumwalt said. After hitting a 4-year high in October, crude oil prices are down roughly 40 percent.
Incoming Senate leader Greg Treat, R-Oklahoma City, was quick to issue cautionary statements after the revenue estimates were certified on Wednesday. “Even though the preliminary estimate shows growing revenue, there are many existing obligations and priorities heading into next year. Senate Republicans will keep our commitment to teachers and want to build on the huge investment made in education last year,” Treat said.
Governor-elect Kevin Stitt held a press conference and warned legislators and state agencies, “This is not a blank check.” He listed some of the state’s comittments, such as bond interest payments, reimbursements to counties that lose revenue due to tax exemptions and replacing lost federal dollars for teaching hospitals. Stitt also reiterated that he does not support raising taxes.