Lawmakers Could Have $285 Million Less To Spend
Monday, February 19th 2007, 8:52 pm
By: News On 6
OKLAHOMA CITY (AP) _ Oklahoma lawmakers could have $285 million less to spend than projected in December, according to figures prepared Monday for a state board meeting.
Tony Hutchinson, director of the Office of State Finance, said the lower projections are tied to expected slower growth in individual income taxes and sales taxes and lower oil and natural gas prices.
Two months ago, the state Equalization Board estimated the state would have about $277 million in growth revenue for next year's appropriations and a total of almost $517 million over-all, counting about $120 million in surplus and $120 million in anticipated spillover from the constitutional Rainy Day Fund.
Now, the total available is expected to be about $232 million, counting only about $106 million in growth funds. The Equalization Board meets Tuesday to update the certification of revenues lawmakers will use to build the state budget for next year.
Hutchinson said tax collections show the state economy is still growing, but not as much as projected earlier in some areas.
``All of the indicators are up _ they're just not as steep as predicted earlier,'' he said.
For instance, state employment is expected to grow at 1.63 percent during the fiscal year that begins July 1, compared to a projected national growth rate of 1.45 percent.
State government is losing about $294 million next year because of a tax cut program enacted in 2006, most of it from a reduction in the state income tax rate. Also deducted from available revenue are commitments made in the areas of highway funding and teacher salaries.
``We've got to be careful and make sure that we are looking at the full impact of the tax cuts and expenditure promises that we made last year and use caution in the way we approach this year's budget,'' said Senate President Pro Tem Mike Morgan, D-Stillwater.
The new figures will create a hole in the budget Democratic Gov. Brad Henry presented when the Legislature convened on Feb. 5.
It also casts doubt on the ability to make further tax reductions, as proposed by some House Republicans.
Unlike the federal government, the Legislature must approve a balanced budget.
The Oklahoma Tax Commission disclosed last week that it was revising its revenue estimates by about $255 million.
A spokesman for Henry said the Democratic governor would not change his budget priorities, but would obviously work within the constraints of fiscal realities.
House Republicans leaders said last week the lower budget projections were tied substantially to an anticipated reduction in corporate income tax collections.
Hutchinson, however, said the Tax Commission did not change the corporate tax projections.
He said individual income tax estimates were adjusted downward by $104.1 million; natural gas and oil tax revenue projections were cut by a total of $66.2 million and sales tax estimates were lowered by $25.9 million.