BOE approves $6.6B for appropriations
Revenues represent 8.5% reduction from current fiscal year
OKLAHOMA CITY — The Board of Equalization on Tuesday approved revenues available for Fiscal Year
2016 discretionary appropriations of
$6,601,534,037, which is $611.3 million, or 8.5 percent, less than
was appropriated for FY 2015, the current
fiscal year ending June 30.
Low oil prices and resulting energy sector losses decreased
revenues from December, when the board first estimated $298.1 million, or 4.1
percent, less available for FY 2016 appropriations.
“The gap more than doubled,”
said Secretary of Finance, Administration and Information Technology Preston L.
Doerflinger. “We were prepared to climb the hill we faced before and we’re prepared
to climb the mountain we face now. It will be difficult, but all options are on
the table and the state will meet the challenge.”
Oil prices have
fallen 55 percent since June. With prices low, energy firms have shut down 573,
or 30 percent, of the drilling rigs in the U.S. since September, according to
Baker Hughes. Oklahoma rigs fell by 42, or 20 percent, during that time. Each
idled rig means potential lost production and jobs, which affects state revenue.
In 2015, Oklahoma may lose 3,800 energy sector jobs, according to economists the
Tax Commission uses to aid revenue projections.
“We have monitored the
oil situation closely for months through regular contact with energy firms,
analysts, financial firms and others. The energy sector is certainly facing
short term pain, but experts we talk with doubt it is facing a long term bust. Once
market prices return to profitable levels, state revenues should start
rebounding, as well,” Doerflinger said.
Also causing revenue loss
is the trend of less revenue being available for discretionary spending despite
growth in gross revenue. In addition, the FY 2015 budget appropriated $292.7
million from various agency accounts on top of the revenues the board approved
for the 2014 session.
“It’s a double budget
whammy to have the structural budget challenges the state already faced on top
of this dramatic oil price dive,” Doerflinger said. “We cannot control oil
prices, but we can control and improve the structure of the budget to better
meet the needs of the day, as the governor has long suggested. Now is the time.”
Doerflinger is
director of the Office of Management and Enterprise Services, which prepares
the revenue estimates the Board of Equalization certifies each year.
The Board of Equalization packet is available on the OMES website: http://www.ok.gov/OSF/documents/boe02172015.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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