First FY 2017 revenue estimate approved
Board approves estimate showing $900.8M shortfall
OKLAHOMA CITY — The
Board of Equalization on Monday approved an estimate of revenues available for
certification for the next appropriated state budget that shows a preliminary
budget hole of at least $900.8 million.
Under
state law, Gov. Mary Fallin will use the estimate approved Monday to build the
executive budget that will be presented to the Legislature when it convenes
Feb. 1.
The
board on Monday approved an estimate of $6,059,238,267 in available revenue for
the FY 2017 executive budget proposal. That amount is $900.8 million, or 12.9
percent, less than was authorized following passage of the FY 2016 appropriated
state budget during the 2015 legislative session.
All
major tax categories are trending down for FY 2017 following an oil price drop
of 70 percent in the past 18 months that has caused Oklahoma to shed 11,600
energy jobs and shutter 59 percent of its oil and gas rigs.
The
board will meet again in February to make a second estimate that will be used by
the governor and legislators to determine FY 2017 appropriations levels for
state agencies.
“As
always, February’s number matters more than December’s,” said Secretary of Finance,
Administration and Information Technology Preston L. Doerflinger. “We don’t
expect it to get better, so we’ve been fully engaged since summer with agencies
and legislators to partner in rising to this challenge.”
By
law, Rainy Day Fund appropriations and certain revolving fund authorizations
are not factored into the board’s estimates. With those spending areas
considered, there will be nearly $1.1 billion less to appropriate next session
than was appropriated for FY 2016.
“The
board’s number today is $900.8 million, but in reality this is a hole of over a
billion dollars that probably grows in February unless there is a dramatic oil
price turnaround,” Doerflinger said.
The
board on Monday also received an updated FY 2016 revenue estimate that projects
a shortfall for the fiscal year, which began July 1 and ends June 30, 2016. The
updated estimate projects FY 2016 General Revenue Fund (GRF) collections will
miss the official estimate upon which the FY 2016 appropriated state budget was
based by 7.7 percent, or $443.3 million.
By law, if GRF collections are
projected to fall more than five percent below the estimate for the remainder
of the fiscal year, the OMES director must declare a revenue failure and
initiate mandatory appropriation reductions to end the shortfall and maintain a
balanced budget.
“Each
agency receiving monthly general revenue allocations will see those allocations
reduced between two and four percent. When the precise amount is determined
later this month, my office will formally declare revenue failure and cause
allocations to be reduced accordingly beginning in January,” Doerflinger said.
To
end the projected shortfall, at least $157 million will need to be cut through
an across-the-board reduction of monthly general revenue allocations to
agencies. Most, but not all, appropriated agencies receive monthly general
revenue allocations.
Doerflinger
is director of OMES, which works with the Oklahoma Tax Commission to prepare
the revenue estimates that are presented to the Board of Equalization.
The
packet the board reviewed Thursday can be accessed on the OMES website: https://www.ok.gov/OSF/documents/boe12212015.pdf
Media Contact
JOHN ESTUS
Director of Public Affairs
(405) 521-3097 | john.estus@omes.ok.gov
 About the Office of Management and Enterprise Services
The Office of Management and Enterprise Services
provides financial, property, purchasing, human resources and
information technology services to all state agencies, and assists the
Governor’s Office on budgetary policy matters. Our mission: Supporting our partners through unified business services. For more information, visit OMES.OK.gov.
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