Oklahoma panel declares revenue failure as collections fall

BY ASSOCIATED PRESS
04/23/2020 01:00 PM
OKLAHOMA CITY (AP) – A state panel led by Gov. Kevin Stitt declared a revenue failure on April 20 for the fiscal year that ends June 30, and the governor warned cuts to agency budgets over the next two years will likely be unavoidable.

The State Board of Equalization declared the failure amid crashing oil prices and dwindling revenue collections as the state’s economy ground to a halt in an attempt to control the spread of the coronavirus.

The board’s decision brings to an end a legal squabble between the governor and the Legislature in which lawmakers sought to have the state Supreme Court force the board to meet.

The governor and Legislature had agreed to use some of the state’s $1 billion in savings to plug a $416 million hole in this year’s budget and prevent any agency cuts, with the exception of one of the governor’s key budget priorities to upgrade the state’s computer system.

And while that agreement shields agencies from cuts through the end of June, Stitt warned agency cuts of about 7.5% could be needed to plug next year’s budget hole, with even deeper cuts in excess of 8% in Fiscal Year 2022.

“The Legislature has some difficult decisions to make when it comes to writing the budget. No doubt about it,” Stitt said.

Because of Oklahoma’s heavy reliance on taxes from oil and natural gas production, the state is used to steep budget cuts resulting from market volatility. But the April 20 crash of oil prices was unprecedented, with prices for a barrel of oil dipping below zero because of a supply glut. Plunging oil prices combined with job losses due to the state’s faltering economy will ensure the budget impact will be long lasting, Oklahoma Tax Commission Director Jay Doyle warned the panel.

“With low prices, excess supply and low demand, drilling activity is not expected to resume in a meaningful way until late 2021 or early 2022,” Doyle said. “This will continue to weigh heavily both on sales and use tax for the state.”

Stitt said he was also working with retail and restaurant officials, along with church leaders, to develop plans for reopening some parts of the state’s economy in the next few weeks.

“For the last 20 days or so, we’ve had a nice trend down in hospitalizations and deaths. We feel like we’re in a good position,” Stitt said. “We’re hitting all the gates the federal government laid out for us to safely reopen, and we’ll do this in phases and we’ll be sure to keep the health of Oklahomans in mind.

“I know everybody’s itching to get the economy safely reopened, and that’s what we’re working on right now.”

Stitt also updated his executive orders on April 20 to allow elective surgeries to resume on April 24, and minor medical procedures and non-emergency dental procedures to resume on April 30.

“Since our data indicates we are in a good position regarding hospital capacity, and provided individual institutions can accommodate their internal demand for (personal protective equipment), it is time to bring some of these procedures back to help our hospitals and the Oklahomans who need them,” Stitt said.

Money

BY STAFF REPORTS
07/23/2020 08:49 AM
The Oklahoma-based tribe look...

BY ASSOCIATED PRESS
06/26/2020 04:54 PM
President Trump says he supports another round of dir...

BY D. SEAN ROWLEY
Senior Reporter
06/26/2020 03:56 PM
On June 22, the Arkansas Racing Commission t...

BY WILL CHAVEZ
Assistant Editor – @cp_wchavez
06/22/2020 09:55 AM
Outback Farm near Pryor grows v...

BY STAFF REPORTS
06/22/2020 08:14 AM
WalletHub.com has Oklahoma at No. 47...

BY STACIE BOSTON
Multimedia Reporter
06/18/2020 11:39 AM
It’s never too late to save fo...