Oklahoma’s economy tracks closely with the price of oil, which has risen significantly since the 2014 downturn. In this episode of Capitol Insider, Bob Dauffenbach, the Senior Associate Dean for Economic Development and Impact at the University of Oklahoma, joins KGOU’s Dick Pryor and eCapitol’s Shawn Ashley to discuss the state’s economic outlook. Dauffenbach also offers his thoughts on what policymakers should be doing to harness the state's economic growth.
Dick Pryor: Our guest is Dr. Robert Dauffenbach, Senior Associate Dean for Economic Development and Impact at the University of Oklahoma Price College of Business. Bob, welcome.
Robert Dauffenbach: Thank you. Glad to be here.
Pryor: Shawn, after years of cutting budgets because of declining state revenue the economic situation in the state is improving.
Shawn Ashley: Yes, one of the things that was sort of overlooked back in December and February, when the Board of Equalization talked about state revenues for the now current fiscal year, was that there was some growth in those revenue collections-- about 100 million dollars. Now that was offset with a lot of obligations, and as a result of that we saw lawmakers of course pass House Bill 1010XX, the big revenue bill, as well as some allocation changes and the Amazon sales tax proposal, all which have taken effect. And we will begin to see those revenues coming into state coffers in the months to come.
Pryor: Bob, in your expert opinion what does Oklahoma's economy look like right now?
Dauffenbach: Quite good. Not evenly good...some areas doing better than others. Oklahoma City has in that metropolitan area has really flourished in recent times and growing much better than Tulsa, and then the balance of the state kind of pulling up the rear. But still we're looking at a state economy that has, as evidenced by as was mentioned increases that we've seen the state tax collections, that's certainly a good indicator of how the economy is doing.
Pryor: Crude oil prices are up, and there is a correlation between those prices and Oklahoma's economic outlook.
Dauffenbach: Absolutely. Absolutely. And we don't really fully understand the plight that our economy, state economy, was taken to as a consequence of declining energy prices. In fact as a consequence of the 2014 slide that we saw in energy prices we got down to almost a negative 5 percent year over year change in gross state product-- a 5 percent loss! And as it's come back, oil prices have come back, well then we're looking at better and better gains. In fact, more recently we've been doing in about the 2 percent area-- 2 percent area of year over year growth.
Ashley: The Oklahoma Employment Securities Commission and then Chad Wilkerson at the Oklahoma City Fed did a report that showed our rebound in the oil patch didn't bring as many employees back in as it had before it dropped off. Will that hinder growth going forward?
Dauffenbach: Well I think... I think that it's hard to examine all of the...all the tentacles that energy has in the economy, but it's certainly the case that it extends beyond employment. For example, royalties, and land values and certainly the entrepreneurial side, the small business side of energy flourishes.
Ashley: I've heard you speak at the Economic Roundtable, the Oklahoma City Chamber of Commerce, and offer a variety of opinions on what policymakers maybe should or maybe shouldn't do. As you look at our state government, what would you say they're getting right and where might they be drifting wrong?
Dauffenbach: I think that the attention that we're getting to education, and that that showed of course in the passage of legislation to raise tax revenues...that's K-12. What we're getting wrong is support for college education. What we need to recognize, and I think we fail to do so, is that nationally there has been no growth--now get this: zero growth in employment for those who have high school education or less-- absolutely no growth despite a 33 million gain in employment since 1992, a quarter century ago. Now that tells you about the demand for labor and its educational content. And that's what we need to be proving, that we're capable of forming policies to direct our future for those new demands for labor.
Pryor: Bob Dauffenbach, as always, it's very good visiting with you. Thank you.
Dauffenbach: Thank you.