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State revenue estimate down for 2004 fiscal year


OKLAHOMA CITY (AP) _ Oklahoma's budget crisis will deepen next year, when state lawmakers will have $592 million, or 10.6%, less to spend than they did this year, state finance officials said Wednesday.

Declining revenue will likely force more budget cuts at state agencies in the 2004 fiscal year, but not as deep as earlier projections. Officials had predicted that next year's shortfall could be as much as $800 million.

``We've always talked about the $800 million pound gorilla. Maybe it's just a $600 million pound gorilla,'' said Scott Meacham, Gov.-elect Brad Henry's choice to head the Office of State Finance.

Estimates by the finance office indicate the state will have slightly more than $5 billion to appropriate in fiscal year 2004. More than $5.6 billion was appropriated for the 2003 fiscal year, including $268 million from the Rainy Day Fund.

A statewide revenue shortfall forced state agencies to slash about $350 million from their budgets this year. Alison Fraser, deputy director of the state finance office, said tax collections have leveled off and no additional budget cuts are anticipated.

When this year's cuts are taken into account, state lawmakers will have $245 million, or 4.7%, less to appropriate in the 2004 fiscal year, officials said.

``We're still looking at considerable budget cuts for next year,'' Fraser said.

The OSF revenue estimates will be presented on Friday to the Board of Equalization, which certifies the amount of revenue available for appropriation by the Legislature.

Henry, who will be sworn in on Jan. 13, said declining revenue will present challenges for his administration and the Legislature, which convenes on Feb. 3. But it also provides opportunities, he said.

``For better or worse, it will encourage state leaders to put the functions of state government under a microscope and determine what works and what doesn't, what should be a priority and what shouldn't be,'' he said.

Meacham said he and other members of Henry's administration are reviewing state agency budgets and will look ``under every rock, in every nook and cranny'' to cut costs.

``If department heads can't justify each dollar that they spend, then maybe we can redirect that money to other priorities such as public school classrooms or health services for the elderly,'' Henry said.

OSF estimates indicate that the state's general revenue fund, which includes state income tax, sales tax and other tax collections, will decrease by $317 million, or 6.7 percent, next year.

Individual income tax collections will decline by $171 million, or 7.9 percent, with only a slight improvement in corporate income tax collections. Sales taxes are estimated to decline by $82.4 million, or 6.2%, from the current year.

Lawmakers also will have far less Rainy Day money to compensate for the difference in collections between the 2003 and 2004 fiscal years. The Legislature appropriated $268 million from the Rainy Day Fund last year, but only about $72 million remains.

Tom Daxon, outgoing director of OSF, said the largest weakness in the state's economy is centered in Tulsa, which has been hit hard by declines in the telecommunications and aviation industries.

Williams Cos., which provides telecommunications services, is based in Tulsa. American Airlines operates a large maintenance facility in Tulsa.

As dismal as the state's revenue outlook appears next year, it is brighter than this year, Fraser said.

Estimated General Revenue Fund collections for the 2004 fiscal year are forecast to be $195.1 million, or 4.6%, higher than the projection for the 2003 fiscal year.
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