RELEASE: BOE approves $6.6B for appropriations


For Immediate Release

Finance, Administration
and Information Technology


Feb. 17, 2015

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:

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