The State Board of Equalization met Tuesday morning to formally certify what Oklahoma’s budget writers had been expecting for weeks.
State Auditor and Inspector Gary Jones moved to make Finance Secretary Preston Doerflinger’s recommendation official, and the board unanimously declared Oklahoma’s second revenue failure of current fiscal year. Doerflinger says he wants the legislature to make this round of cuts.
“I can only cut across the board to agencies that receive general revenue funds,” Doerflinger said. “The legislature could come back in and do more targeted funds and try to shield some areas.”
The latest estimate says the state will have $4.8 billion to appropriate next year. The hole is officially $1.1 billion, but the Associated Press says the deficit will actually be closer to $1.3 billion once one-time funds are considered:
Plunging revenue collections have widened the shortfall from the original projection of $900 million in December.
Since then, state finance officials say collections from every major source of tax revenue have decreased, with the exception of a slight boost in gross production tax on natural gas.
Next fiscal year’s budget is based on projecting oil at $40.29 per barrel.
Gov. Mary Fallin says despite the deeper hole, she's not in favor of rolling back the income tax cut that went into effect January 1.
“Letting people keep more of their money, it’s only probably going to be about $100 million now because people have lost jobs out of the $1.3 billion budget shortfall,” Fallin said. “$100 million is not a big hit.”
Since June, general revenue projections have fallen $549 million, or nearly 10 percent. $106 million of that drop has happened since December, alongside a 21 percent decline in oil prices. State Treasurer Ken Miller says Oklahoma must continue diversifying its economy.
“It’s not going to replace the fact that we are an energy state. And we are going to, to some degree, have to live with the ups and downs of the energy industry because it is our anchor industry, and very important to the state,” Miller said.
Doerflinger and Fallin hope to avoid another across-the-board cut with the latest revenue failure by letting legislators make targeted cuts, but that won’t happen until early March.
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