State Treasurer Scott Meacham announced last week that September tax revenues were enough to cover the reduced spending obligations Oklahoma state government faces. As a result, the five percent cut in allocations for all state agencies, started in August, continues.
In sum, the state’s first quarter collections are 25 to 30 percent below estimates used to set this year’s budget.
In September, payments of estimated taxes provided a small income boost to the state, but not enough to offset the broader drop over prior projections. Meacham told The City Sentinel he sees “some hopefulness” in possible natural gas rice increases, and subsequent revenue boosts for the state. In essence, however, the cautious treasurer said “If you look at the whole picture, the reality is we’re about where we were last month.”
Oklahoma fits into a national picture, with an economic recovery less robust than experienced in the aftermath of other post-World War II recessions. Indiana Governor Mitch Daniels, speaking in August at the national meeting of CapitolBeat, the association of state government reporters and editors, said his fiscal analysts were anticipating that even the emerging economic recovery will not restore state government revenues to pre-recession levels. In fact, he said then and in a September 3 Wall Street Journal commentary, government revenue would likely remain below 2007 levels until 2011 or later.
As reported in The City Sentinel (September 30) and posted online for Tulsa Today, some Oklahoma state fiscal policy analysts have been reaching a similar if not quite identical conclusion about the Sooner State. The analysis was also developed in an essay for this month’s issue of Perspective magazine.
An apparent consensus now centers on this point, with both the liberal-oriented Oklahoma Policy Institute and the conservative-oriented Oklahoma Council of Public Affairs projecting several years of depressed state tax revenues. The groups differ, of course, in policy preferences flowing from that conclusion.
David Blatt of the Oklahoma Policy Institute, Barbara Hoberock of the Tulsa World reported last week (October 15), “said it is likely that [state] revenues won’t return to the levels seen in 2008 until 2012 or 2013.”