By Patrick B. McGuigan | Oklahoma Watchdog
OKLAHOMA CITY ??The vibrant Oklahoma economy?s impressive expansion, with the state in the top three for per capita personal income growth?during the past?few years, is bringing a lot more money into state tax coffers.
GOV> MART FALLIN has not made several significant decisions about the Executive Budget she will submit to the Legislature in February.
However, taxpayers probably should not count on significant tax relief any time soon.
The Legislature will have about $214.6 million more to spend for fiscal year 2014 than in FY 2013, yet state officials don?t seem prepared to make a fresh push for a major personal income tax reduction.
Finance Secretary Preston Doerflinger said Gov. Mary Fallin has not made several significant decisions about the Executive Budget she will submit to the Legislature in February.
However, Doerflinger said Fallin likely would support a $50-million increase in funding for the Department of Human Services, as projected in the Pinnacle Plan released last summer. The plan reflects an accord Fallin and other officials signed, which flowed from lengthy controversy and litigation.
Additionally, Fallin supports implementing historic judicial reform legislation. While that is intended to save money during the next five to 10, in the near-term the state Corrections Department wants money for salary hikes and to cover implementation costs for that ?reinvestment? initiative.
Corrections is not alone. State agencies have requested increased spending totaling $1.4 billion, far surpassing the revenue growth, Doerfllinger said.
Hanging over the state government?s financial planning is the so-called ?fiscal cliff? at the federal level, with broad implications for state governance. In response to a question, Doerflinger said that his hunch now ? 10 days before the end of the calendar year ? is that the nation will ?go over the cliff, sort of.?
Doerflinger said he anticipates federal negotiations will continue through the end of the year, with some accord emerging only after the eleventh hour.
Doerflinger said the state Finance staff is basing its projections on tax increases and federal sequestration that will, if not changed, occur beginning Jan. 1.
In Oklahoma, despite the spending pressures from agencies, Doerflinger said there likely will be a tax reduction proposal from the Fallin administration, but ?not as detailed or broad? as what was put on the table last year. He declined to indicate a percentage or fraction for possible reductions in personal income taxes.
This months projection?s led state finance officials to anticipate a deposit into the Constitutional Reserve, popularly known as the Rainy Day Fund, of $66.4 million, which now has a $577.5 million balance.
The expected deposit will build the fund past $600 million for the first time in history. That fund is capped at 15 percent of the prior year?s general fund collections, meaning that additional revenue growth might take the reserve to $834.7 million.
When Fallin took office in January 2011, the Rainy Day Fund had 3 cents on the ledger. Doerflinger said officials have projected revenue bumps flowing into the General Revenue Fund:
- Personal income tax collections leaping ahead $121.1 million, or 6.1 percent over the estimate a year ago
- Corporate income taxes rising $164.6 million, or 51.3 percent
- Sales taxes increasing $126.6 million, or 6.6 percent
- Interest and investment estimates up $3 million, or 3.6 percent.
On the flip side, revenue from gross production taxes on oil and gas decreased. For natural gas, the decline is $41 million (21.8 percent); for oil the decline was $799.8 million or 21.8 percent.
Oklahoma Finance Secretary Preston Doerflinger told the state Board of Equalization the state will have a lot more money to spend this coming year.
The State Board of Equalization on Thursday certified $7 billion for expenditure next year, reflecting growth in tax revenues in line with the healthy state economy.? Doerflinger said the coming fiscal year will be the first since the beginning of the Great Recession in 2008 where revenue available for expenditure exceeds $7 billion.
That total comes from certified funds anticipated at $6 billion, with $5.7 billion available for appropriation, and another $1 billion ?in other income streams.
Thursday?s revenue certification actually understates significantly the total state budget. Jill Geiger, state budget director in Doerflinger?s office, told CapitolBeat that as of Wednesday, ?The total budget for all funds (state appropriated, federal, agency special accounts, etc) is $24,399,489,307.?
After the constitutional board?s formal certification of anticipated revenue, state Senate President Pro Temp Brian Bingman, a Sapulpa Republican, said national uncertainty ?will continue to adversely impact the states. We must plan accordingly, and while celebrating positive indicators of growth, remain cautious and forward-thinking.?
Contact Patrick B. McGuigan at?Patrick@capitolbeatok.com?and follow us on Twitter: @capitolbeatok.
Source: http://watchdog.org/65063/ok-government-revenue-grows-but-big-tax-cut-unlikely/
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