House Republican leaders said today they are optimistic conservative fiscal policies currently in place will help Oklahoma withstand a budget shortfall next fiscal year.The state Board of Equalization certified today that the Legislature will have $309.6 million less to spend in fiscal year 2010 compared to the current fiscal year, or a 4.4 percent drop.
According to the NCSL, Oklahoma is one of only ten states in the country who are not experiencing revenue shortfalls or significant budget gaps this year.
“There are many states in the country that face financial shortfalls larger than Oklahoma’s entire $7 billion budget; this is no time for panic,” said House Speaker Chris Benge, R-Tulsa. “Much of our good fortune to this point can be attributed to the fact we have followed a concept Oklahomans follow every day—living within our means. It is certainly going to be a difficult budget year, but I am confident that together our state leaders will pass a budget that will continue to move our state forward in a time when many other states are forced into drastic service and employee cuts.”
House Budget Chairman Ken Miller noted that though the individual income tax collections are predicted to drop by $104 million, or 4.8 percent, the static numbers do not tell the whole picture.
First, $54 million for the Oklahoma’s Promise scholarship program and $190 million for the ROADS Fund came directly out of the personal income tax estimates prior to the certification. Those are two obligations the Legislature has met before session has even started, which makes estimated income tax collections appear lower than they truly are.
Also, the state sales tax is estimated to grow by $84 million, or a 5 percent increase. Rep. Miller said allowing taxpayers to keep more of their hard-earned dollars has resulted in Oklahoma families spending the money as they see fit, which has helped sales tax collections and employment.
“Tax cuts are a fiscal stimulus and Washington would do well to follow Oklahoma’s lead during these tough times,” said Miller, R-Edmond. “Just because money isn’t rushing into the state treasury doesn’t mean that money disappears. Those dollars stay with the Oklahomans who earned them for spending on necessities like utilities, tuition, groceries and gas – and that spending creates jobs and income.”
Lean budget years are also a good time to look for additional efficiencies within government, said Rep. Scott Martin, vice-chairman of the House Appropriations and Budget Committee.
In recent years, government spending has been restrained by using surpluses mostly for one-time expenditures and not ongoing expenses, while state officials have also built a robust savings account in case of a financial emergency.
“Since Republicans have taken over the majority in the House, we have worked to streamline government and make it as efficient as possible for the taxpayers,” said Martin, R-Norman. “In a year where there is less money to spend than the year before, we have to get creative in finding ways to save money while making sure our agencies are resourceful with the funds they do receive.”
