Cimarron County, Schools Make Case for Ad Valorem Fix

OKLAHOMA CITY – Cimarron County has more than twice the land owned by the Commissioners of the Land Office than any other county in Oklahoma, participants noted in a legislative study today.

A large portion of that approximately 225,000 acres provides funding for several of Oklahoma’s higher education institutions, according to Secretary of the Commissioners of the Land Office Harry Birdwell. There is a total of 236,000 acres in land owned by the state in Cimarron County, according to county officials.

State Rep. Casey Murdock said he requested the study to provide his colleagues with insight into how that land lowers the amount of ad valorem taxes available to Cimarron County and its school districts. There is also a significant negative impact on the local millage rate and bonding capacities of the school districts and county.

“For the cash-strapped school districts in that county, ad valorem tax revenues are a big deal,” said Murdock, R-Felt. “The residents and county and school officials of Cimarron County would like to see some way for them to recover that lost money. After working with the Commissioners of Land Office, I think we have several ideas, but have not yet fully vetted them.”

It is unlikely that the Commissioners for Land Office could simply remit the money lost, because of laws regarding how they operate their trusts. Other states have dealt with the issue though.

“Any solution we choose would not just be for Cimarron County, but we are using them as our example because the impact is so much higher there,” Murdock said. “We have to explore if some of the options we are discussing meet state constitutional standards, but if they do, we will pursue them in the upcoming legislative session.”

Although the Commissioners of Land Office provides revenues for schools and higher education, not all institutions receive funds equally, according to Birdwell. The agency owns 224,993 acres, of which 62,801 acres are set aside for school districts.

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Additional information:
The three counties containing the greatest proportion of CLO land are Cimarron County (19.78% of the county is CLO land), Pawnee County (7.07%) and Kay County (6.4%), according to the CLO Real Estate Division)
CLO distributes to school districts based on their average daily attendance, a figure provided to them by the state education department
The estimated impact of CLO on Cimarron County includes about $72,897 in ad valorem taxes, a reduced bonding capacity of about 20 percent and reduced millage rates

General Revenue Funds Shows Big Jump in Corporate Taxes

OKLAHOMA CITY – Corporate income tax collections continued climbing in March, while total collections to the General Revenue Fund (GRF) declined following an aberration in the normal flow of personal income tax receipts and ongoing reductions in natural gas revenues.

"The sharp upward climb in corporate income tax collections is extremely encouraging. Our economy is still expanding, although perhaps at a more moderate pace," said Secretary of Finance and Revenue Preston L. Doerflinger.

Collections to the GRF totaled $413.9 million in March, which is $20.6 million or 4.7% below collections for March of Fiscal Year 2012, and $61.6 million or 13% lower than the official estimate upon which the FY-2013 budget is based.

Gov. Fallin Statement on Sequestration

OKLAHOMA CITY – Oklahoma Governor Mary Fallin today released the following statement regarding sequestration and the looming federal budget cuts to the military and government agencies:

“Oklahoma agencies have had months to prepare for a reduction in federal funds. While it is still unclear how many dollars each state agency will lose, we do not expect an immediate loss in state services. Months ago, I asked my cabinet secretaries and state agency directors to plan ahead for sequestration. We believe the state is well-prepared.

“With that said, it is clear the sequester is creating a chaotic and uncertain environment for businesses looking to invest, state governments tasked with crafting budgets, and those who receive federal benefits or who work for or contract with the government. That uncertainty is bad for the economy and is destroying jobs. Furthermore, the large and seemingly haphazard cuts to military spending reduce the effectiveness of our armed services and hurt the economies of states with large military presences, such as Oklahoma.

“President Obama has said he doesn’t like the sequester, but he has not laid out a viable alternative.  It is now up to him to work with Congress and deliver solutions. That starts with getting serious about spending cuts.

“In Oklahoma, we faced a budget shortfall of over $500 million in 2011 – nearly ten percent of our total budget. Like other states, we made tough choices, cut spending and worked to make state government more efficient and effective. We balanced our budget. There is no reason the federal government cannot do the same.”

State Revenue Certified for 2014 Fiscal Year

OKLAHOMA CITY – Revenue figures approved Tuesday by the state Board of Equalization showed an additional $34 million available for appropriation for Fiscal Year 2014 than was used in Gov. Mary Fallin’s executive budget proposal.

In all, an extra $212.6 million in growth revenue is available for Fiscal Year 2014 appropriations than was appropriated for FY 2013, the current fiscal year ending June 30, according to figures approved by the seven-member board, which is chaired by the governor. The board approved revenues for appropriation topping $7 billion for FY 2014.

Secretary of Finance and Revenue Preston L. Doerflinger issued the following statement:

“Three years of impressive economic expansion have Oklahoma back at pre-recession revenue strength. That growth has generated $34 million more for appropriations than we used to build the governor’s proposed budget. Our priority now is to begin immediate work with the Legislature to set an honest state budget that uses these growth revenues to reduce income taxes and boost funding for core services like education and other priorities. Today’s picture is bright, but the looming federal sequester is anything but. There is no doubt it could hit our defense sector hard. Oklahoma’s best path forward is to continue emphasizing fiscal restraint and enacting policies that spur the type of impressive economic expansion enjoyed for these past three years.”

Doerflinger is director of the Office of Management and Enterprise Services, which prepares the revenue estimates the Board of Equalization certifies each year. Highlights of Tuesday’s revenue certification include:

·         The General Revenue Fund will have a surplus of $83.3 million to deposit in the Rainy Day Fund in July, increasing the amount in the state savings account to $660.8 million, an all-time record.

·         Oklahoma’s steady economic growth since the Great Recession has led to total state revenues increasing by 2.6 percent each of the two past fiscal years and projected to rise 3.1 percent next year.

·         Personal income tax collections are projected to generate $2.1 billion for fiscal year 2014, which is $155.2 million more than fiscal year 2013 – a 7.8 percent increase.

·         Sales tax collections are projected to generate $2 billion for fiscal year 2014, which is $106.5 million more than fiscal year 2013 – a 5.5 percent increase.

·         Economic snapshot: Oklahoma has added more than 62,000 jobs in the past two years, resulting in the nation’s sixth-lowest unemployment rate, 5.1 percent, and second-strongest manufacturing job growth rate.

Voters May be Asked to Further Limit State Spending

OKLAHOMA CITY – State Rep. Elise Hall is concerned that without a more appropriate spending limitation, Oklahoma’s public sector could grow too fast in “boom” years.

House Joint Resolution 1011 would ask voters to approve a constitutional limit on appropriations that would lower the current limit of a 12 percent increase on the previous year’s appropriations when adjusted for inflation.

The legislation has been approved 14-9 by the House Appropriations and Budget Committee.

“When lawmakers make large appropriations in revenue growth years, this leads to drastic cuts in revenue shortfall years, as we’ve witnessed firsthand in the last few years,” Hall, R-Oklahoma City, said. “I think the current spending limitation that restricts the annual growth of the state budget to 12 percent should be lowered to 7 percent to further restrict public sector growth.”

State government growth has regularly exceeded private sector growth in Oklahoma since voters approved a 1985 spending limitation, according to Oklahoma Council of Public Affairs fiscal analyst Jonathan Small. State employment grew by 8.57 percent from 2000 to 2010 while private sector employment grew by only 6.07 percent. Government expenditures have grown 72.20 percent from 2001 to 2010 while private earnings have grown by only 40.71 percent.

“Oklahomans overwhelmingly support the idea of shrinking state government, so I think it is especially appropriate to limit growth,” Hall said. “It is better to save surplus revenue for shortfall periods than to overcommit the state to expenditures that it cannot sustain.”

House Committee to Examine Governor’s Plan for Education Savings

Rep. Jason Murphey
R-Guthrie

OKLAHOMA CITY – Members of the Oklahoma House of Representatives members are set to learn the details of Governor Fallin’s “Open Range” plan.

Fallin’s open range proposal seeks to place more money in common education classrooms by allowing school districts to take advantage of the savings from the state’s recent consolidation of information technology resources. The IT consolidation is already set to save Oklahoma state agencies approximately 40 million each year.

The House Government Modernization committee will receive testimony about the proposal from state CIO Alex Pettit during its 10:30 a.m. Thursday committee meeting in Room 412C of the Oklahoma State Capitol. The public is invited to attend.

Strong Income Tax Receipts, September Collections Resume Rise

OKLAHOMA CITY – Revenue collections ticked up in September, pushed by strong income tax remittances, State Treasurer Ken Miller announced this week as he released the monthly gross receipts to the treasury report.

Total collections were almost three percent higher than in September of last year. Three of the four major tax categories were positive, with income tax leading the way up almost 16 percent. Sales tax and motor vehicle receipts also showed growth.

Collections from the gross production tax on oil and natural gas remained well below prior year totals, down almost 40 percent, but off their low of 54 percent below the prior year in August, indicating we may have turned a corner, Miller said.

“Oklahoma’s economy continues to climb up the expansion side of the business cycle in spite of low prices for natural gas,” Miller said. “After two years of sharp growth in revenues, collections have leveled off over the past half year as we close in our all time high from December 2008.”

The positive turn on gross receipts comes after collections dropped below the prior year during three of the past seven months, including August. However, oil and natural gas production collections have been consistently lower than the prior year for 10 months.

“Sales tax collections, generally viewed as a measure of consumer confidence, are up almost six percent in September,” Miller said. “This is obviously a good sign, even though sales tax has been growing by double digits for much of the past year.”

FY13 General Revenue Collections 0.4% above estimates

OKLAHOMA CITY – Total collections to the state’s General Revenue Fund slowed in August, but sales tax growth remained a silver lining for the Oklahoma economy, Secretary of Finance Preston L. Doerflinger said Wednesday.

"Our overall collections have been diminished by low energy prices in the final months of the last fiscal year, plus refunds made during the first two months of Fiscal Year 2013," Doerflinger said. "And the drought undoubtedly has had some negative effect. But those factors haven’t dampened consumer confidence."

The finance secretary, in releasing his monthly General Revenue Fund report, added: "We’ve also seen lower than expected personal income tax collections, but part of that is related to the timing of the remittance of withholding taxes. This has been overcome largely by sales taxes, which beat prior year collections by double digits over the first two months this fiscal year."

Total collections to the General Revenue Fund for the month of August were $386.4 million, down $28.4 million and 6.8 percent from a year ago. The amount collected for the month was $17 million and 4.2 percent lower than the estimate.

It was only the third time since April, 2010, that monthly GRF collections had been below both prior year receipts and the estimate.

Doerflinger said it is important to note that despite the lull in personal income and oil and natural gas tax receipts, total GRF collections for July and August were still above the estimate by 0.4 percent. Sales tax collections, however, beat the estimate by 4.1 percent in July and by 6.3 percent in August. Sales tax receipts in August also exceeded the prior year by 12.1 percent.

"It’s too early to proclaim a slowdown in the Oklahoma economy, which has had an incredible rebound from the recession over the past two years" he said. "After all, sales tax growth is perhaps the leading indicator of our economic strength, our corporate taxes are up and our 4.9 percent unemployment rate is the envy of neighboring states.

"Gov. Mary Fallin has gained national attention for her job recruiting efforts and for her pro-growth policies that have helped the Oklahoma economy recover. Our constitutional Rainy Day Fund now has a near-record $577 million in it after being completely drained as a result of the recession. In short, the Oklahoma economy appears to have a lot of power and vitality moving forward."

Doerflinger said his only real worry at this point stems from external factors such as financial troubles abroad and the failure of the president and Congress to reach an agreement on the federal budget.

"I hope another national financial calamity does not happen," he said, "but it’s critical to be prepared just in case. I applaud Speaker-designate T. W. Shannon’s plan for a legislative study to develop contingency plans in the event Washington doesn’t gets its act together and that leads to massive cuts in federal funds going to the states.

"At the Office of Management and Enterprise Services, we have requested agencies to notify us as we go through the budget request process of any known impact from the sequestration provision of the federal Budget Control Act. That will give us a sense of which programs will be subject to cuts if the federal budget issues are not resolved and automatic reductions are triggered."

Governor Fallin said, "The latest revenue report paints the picture of an Oklahoma economy that is fundamentally sound. While some collections have slowed, overall revenues in this Fiscal Year continue to be above initial estimates and sales tax revenues continue to grow at a strong clip. Furthermore, other economic indicators – like the state’s 4.9% unemployment rate – remain strong.

"Our recent economic success, however, won’t continue unless we continue our laser-like focus on pro-growth reforms. For Oklahoma to continue its forward momentum we will need to continue to pursue job creating policies here on a state level."

The Governor added that "Oklahoma will continue to be affected by national and international forces that remain outside of our control. Global energy prices, uncertainty surrounding policies from Washington, and the potential for massive military spending cuts under ‘sequestration’ all have the potential to dramatically impact our economy and our revenue collections. As governor, I will continue to advocate for those policies that support Oklahoma job creation and economic growth."

General Revenue collections for the first two months of the new fiscal year were $775.5 million, down $22 million or 2.8 percent from the same two months of FY-2012 but remained $3 million or 0.4 percent above the estimate.

Major tax categories in August contributed the following amounts to the General Revenue Fund:

Record Rainy Day Fund Deposit Announced

OKLAHOMA CITY – Sales tax revenue climbed by 13.1 percent in June over the previous year as Oklahoma closed out Fiscal Year 2012 collections to the General Revenue Fund with enough money to make a record $306.8 million deposit into the state's Rainy Day Fund, Secretary of Finance Preston Doerflinger announced Tuesday.

"This preliminary report drives home the role consumer confidence has played in Oklahoma's economic recovery in the fiscal year ending June 30," Doerflinger said. "For the year, sales tax collections rose by 9.7 percent over the prior year. In June and at other times during the year, strong sales taxes helped ease energy tax variances due to low prices and tax rebates."

Tuesday’s report shows FY-2012 collections to the General Revenue Fund totaled $5.543 billion. This amount was $405.3 million and 7.9 percent above collections for FY-2011 and $306.8 million, or 5.9 percent above the estimate for FY-2012.

"It's stunning to realize that the Rainy Day Fund contained only $2.02 when Gov. Mary Fallin took office less than two years ago." Doerflinger said. "With this deposit added to last year's $249 million deposit, we now have $556 million in our savings account and have moved within striking distance of the all-time record of $596.6 million reached before the recession."

Gov. Fallin said, "It's great to end the 2012 fiscal year on a high note, as the entire year was a boon for the Oklahoma economy as collections exceeded the previous year by nearly 10 percent. Since January 2011, we've had positive growth over the prior year in 16 out of 18 months, and we've had double-digit growth in 10 months. We’ve also had a net increase of 38,200 jobs in the past 12 months ranking our state second in the nation for job creation. Our pro-business policies are succeeding in growing the economy and providing more opportunities for Oklahoma families.

"Looking ahead to next year, it's important we continue our focus on policies such as workforce development and education reform, government modernization, as well as tax reform that will help us bring even more jobs and investment to the state."

Doerflinger said he is hopeful that energy prices will improve during the new fiscal year, "understanding the impact of the oil patch on the Oklahoma economy. But our recovery has been broad-based, as high-lighted by the Oklahoma Department of Commerce's recent Economic Snapshot.

"That report, among other things, pointed to Oklahoma gaining more than 38,000 jobs since the first of the year, ranking second among the states. We lost a few hundred manufacturing jobs in May, but kept our No. 1 ranking in that area with a growth rate of 6.6 percent.

"I also found it interesting that our unemployment rate dropped to 4.8 percent in May at the same time the number of Oklahomans seeking jobs increased. Other states with low jobless rates have seen their workforce numbers shrink."

Oklahoma's unemployment rate is the fifth lowest in the country and compares to the national rate of 8.2 percent.

Miller Issues June Economic Report

State Treasurer Ken Miller released his June Economic Report over the weekend.


Miller says in the report:

"States have less than six months to prepare for the first set of consequences of Washington’s inability to reach agreement on reducing the national debt. The last battle over raising the federal government’s debt limit resulted in the Budget Control Act of 2011 that mandates $1.2 trillion in spending cuts over 10 years, beginning January 2013.

"One likely place federal spending will be reduced is in payments to state governments for operation of mandated programs."

Click here to read the full report 

Total Collections Grow in May as Gross Production Continues Slide

OKLAHOMA CITY – Even though natural gas and crude oil prices are lower than expected, Oklahoma’s total revenue collections continue to rise, driven primarily by income and sales, State Treasurer Ken Miller said today as he released the monthly gross receipts report for May.

Ken Miller

“With incomes climbing and sales tax collections on the rise, Oklahomans continue to show confidence in the economy in spite of renewed global uncertainty and a pullback in U.S. job growth,” Miller said.

May collections are up by 5.8 percent from May of last year, Miller said. That compares to average growth over the past 12 months of 9.2 percent.

Watching natural gas and oil prices

Two-year Revenue Growth Streak Ends as Collections Fall

OKLAHOMA CITY – Oklahoma’s two-year revenue growth streak has come to an end as total revenue collections in March fell slightly lower than collections from the same month last year, State Treasurer Ken Miller said last week as he released the March gross receipts report.

Total collections for the month were $920.6 million, down by about $2.6 million or 0.3 percent from March of last year. Miller said the biggest drop among the major sources of revenue came from the gross production tax, which fell by more than one-third.

Income tax collections were lower for the first time in eight months with negative corporate income tax collections weighing down the slightly positive personal income tax receipts.

Sales tax receipts are the only major revenue source that outperformed the previous year with collections surging 15 percent compared to March 2011.

Watching the energy sector

“In the coming months, we will closely watch the energy sector as it is a leading sector of Oklahoma’s economy,” Miller said.

Gross production collections were down in March for a fourth consecutive month, reflecting the impact of low natural gas prices. On Monday, the spot price of natural gas closed at its lowest point for the year, below $1.90 per thousand cubic feet (mcf), at the Henry Hub in Louisiana, the primary marketplace for Oklahoma-produced natural gas.

“While one month does not a trend make in overall revenue collections, four continuous months of decreasing gross production collections is getting trendy,” Miller said. “And due to the timing of gross production collections, March receipts reflect market activity from January. We should expect a period of shrinking natural gas tax collections until prices rebound, especially if the price triggers a lower extraction tax rate.”

Miller said state financial authorities will keep a close eye on natural gas prices.

“Next year’s official revenue estimate reflects natural gas at $3.64 per mcf,” he said. “In addition, state law mandates the currently assessed tax rate of seven percent be lowered to four percent if the average monthly price falls below $2.10 per mcf.”

Miller said the energy sector, which helped bolster Oklahoma’s recovery from the national recession, is tied to approximately one-third of the state’s economic activity.

“Undoubtedly, the strong price of crude oil is helping to compensate for the downturn in natural gas prices,” he said.

The exact percentage of gross production revenue generated by natural gas in March is not yet calculated, but the trend over the past several months has been downward. In October, it was 51 percent. In February, it was 35 percent.

Some positive news

House Republicans outline tax credit reforms

OKLAHOMA CITY – Oklahoma’s tax credit system would undergo widespread reforms under a plan outlined by House Republican leaders last week.

“A tax credit should benefit taxpayers more than it costs them. Period. That hasn’t been the case in Oklahoma, but under this plan, it would always be the case,” said Rep. David Dank, R-Oklahoman City, chairman of the joint legislative Task Force for the Study of Tax Credits and Economic Incentives.

Dank said meaningful tax credit reform is an important first step for the Legislature to take as it considers reducing and phasing out the state’s personal income tax.

“We need to remember that we cannot accomplish real tax relief for all Oklahomans until we put an end to the costly sweetheart deals that have been handed to a very few in the past. Those giveaways cost us hundreds of millions of dollars each year. Ending tax credit abuse is one vital ingredient in assuring lasting tax relief for all,” Dank said.

The strategy outlined today would save between $250 and $300 million in fiscal year 2013 and continue saving millions of dollars annually in the future. It proposes:

• Extending the current moratorium on all tax credits another two years;
• Enacting a constitutional amendment establishing specific criteria for tax credits;
• Ending transferability of tax credits; and
• Requiring all future tax credits and all credits placed on moratorium to meet the constitutionally-required criteria and receive legislative approval in order to be enacted or removed from moratorium.

“Oklahoma’s tax credit system today is a big block of Swiss cheese with no rhyme or reason whatsoever to all its holes and cutouts. It’s time to wipe the slate clean and start over,” said House Speaker Kris Steele, R-Shawnee. “This policy is as pro-growth and fiscally conservative as it gets. It’s the right thing to do for taxpayers and will result in a better tax credit system that leads to economic growth without wasting taxpayer dollars.”

If all the reforms are enacted, all tax credits placed on moratorium would have to be brought back one-by-one by affirmative votes of the Legislature under criteria that would be in the state Constitution. Future credits would also require legislative approval and would have to meet the constitutionally-required criteria.

Steele plans to seek a constitutional amendment that would place the tax credit criteria adopted by the task force in the Oklahoma Constitution. House Joint Resolution 1089, by Steele, would send the criteria to a vote of the people in November. If approved, the criteria would be placed in the Constitution.

Under the criteria:

• All credits would require pre-approval by the Legislature;
• No tax credit would be transferable;
• All tax credits would be subject to full transparency and regular auditing by the State Auditor;
• Any proposed tax credit would have to be accompanied by a fiscal impact statement detailing how it would affect the state budget;
• All tax credits would be subject to caps and specific termination dates;
• No tax credit could be enacted within the final five days of any legislative session.

“It protects taxpayer dollars – plain and simple – and ensures all tax credits actually benefit the state,” Steele said. “But get ready, because as soon as we speak a word of this proposal, special interest groups are going to start lobbying tooth and nail in defense of their credits. Our message to them is simple: If the credit meets the criteria, the credit is useful and can stay, but if it fails the criteria, it’ll have to go.”

House Bill 2978, by Dank, would statutorily enact the criteria.

House Bill 2976, by Dank, would extend the tax credit moratorium that has been in place since 2010 for another two years. The extended moratorium only applies to tax credits. It does not apply to tax incentives such as the Quality Jobs program and certain engineering and oil and gas incentives that Dank said have adequate safeguards and produce net economic gains that exceed the cost of the incentives.

“An extended moratorium gives the Legislature additional time to consider the worthiness of each individual tax credit and to put in place specific criteria the task force believes must apply to all tax credits, be they existing or future proposals,” Dank said.

HB 2979, by Dank, would end transferability of tax credits.

“Transferable credits are bought and sold like poker chips by folks who’ve provided zero services to the state. This practice was identified by the task force as perhaps the most constitutionally questionable aspect of the entire system. It must end,” Dank said.

House Bill 2977, by Dank, would extend the Task Force for the Study of Tax Credits and Economic Incentives for another year, until January 2013.

“It benefits us to have the task force continue the analysis it started last year and serve as a watchdog as this reform process plays out over the next few years,” Dank said.

Rep. Earl Sears, the House Appropriations and Budget Committee chairman, said the reforms will have a direct benefit on the FY 13 state budget and future budgets.

“We’re talking about hundreds of millions of dollars here that we can use to fund core services or return to taxpayers. It’s a significant opportunity for us,” said Sears, R-Bartlesville. “I’ve been honored to be part of the task force and believe Chairman Dank’s leadership has been outstanding. This is what good, honest government is all about.”

NOTE: For accompanying video, go to http://www.okhouse.tv/iViewVideo.aspx?VideoID=403

Revenue Collections End Fiscal Year on High Note

OKLAHOMA CITY – General Revenue Fund collections hit a high note to end 2011, recording double-digit growth in December and for the first 6 months of the current fiscal year, Office of State Finance Director Preston Doerflinger announced Tuesday.

"We had the best two months of the 2012 fiscal year in November and December, putting an exclamation point on our recovery from the Great Recession," Doerflinger said as he released the OSF's monthly General Revenue Fund report.

In December, total collections grew by 19.3 percent over the same month a year ago, while beating the official estimate by 16.6 percent.

That came on the heels of November's report showing growth of 22.6 percent and 18 percent, respectively, for that month over November of the prior year and the estimate.

"As we look toward the second half of the fiscal year, it is unrealistic to expect that such dramatic increases in receipts will continue on a month-to-month basis," said Doerflinger, secretary of finance in Gov. Mary Fallin's cabinet. "But all signs point to our economy continuing to outperform other states in our region and the nation as a whole."

"A big reason for this," he continued, "has been the mini-boom in the oilfields, which has generated economic activity throughout our economy and contributed to our growing manufacturing base.

Oklahoma Economy Celebrating 22 Consecutive Months of Growth

OKLAHOMA CITY – Oklahoma’s economy quickened the pace of its recovery during 2011, State Treasurer Ken Miller said yesterday as he released the state’s monthly gross receipts report.

“December was 11.1 percent better than the prior year, the fourth quarter was 10.5 percent ahead of the final three months of 2010, and total year collections surpassed the previous year by 9.6 percent,” Miller said. “We saw healthy growth each month ranging from four to 16 percent with an average at the double-digit mark.”

Miller said December was the fifth time in the past eight months that collections rose by more than 10 percent over the prior year and marked the 22nd consecutive month of growth.

“Twelve-month collections now stand more than $1.3 billion higher than in February of 2010. Since we hit the trough almost two years ago, more than 68 percent of the revenue lost from our peak in December 2008 has been recovered,” he said.

Miller said sales tax collections indicate a happy holiday shopping season in Oklahoma. December collections, reflecting sales between mid-November and mid-December, were $20.42 million or 6.3 percent higher than the last Christmas shopping season.

Looking forward

National and state-specific forecasts point toward continued economic improvement.

Recent Bureau of Labor Statistics data list Oklahoma with year-over-year employment growth of three percent, surpassing all surrounding states. The closest competitor was Texas with growth of 2.2 percent.

A U.S. Chamber of Commerce report shows Oklahoma with the nation’s fourth lowest unemployment rate, adding jobs 3.5 times faster than the national rate in 2011.

During the past 12 months, figures from the Oklahoma Employment Security Commission and Bureau of Labor Statistics show the number of jobs grew by almost 16,500, while the labor force grew by just more than 3,000. During that time, the unemployment rate dropped from 6.9 percent to 6.1 percent.

Nationally, The Conference Board reports consumer confidence grew in December from the month before and now stands at levels not seen since April. Closer to home, the Creighton University Economic Forecasting Group anticipates Oklahoma in 2012 will have the second highest growth in gross state product in the nine-state Mid-America region at 4.6 percent. North Dakota is forecast to grow at 6.8 percent.

December collections

Standstill Budgets Likely Next Fiscal Year

OKLAHOMA CITY – The Oklahoma Board of Equalization this week certified approximately $6.5 billion in revenue for the state budget in fiscal year 2013, an increase of $120.3 million over the previous year.

The improvement from last year is a result of increased tax revenues as Oklahoma’s economy continues to improve. 

However, the state faces an estimated budget shortfall of as much as $150 million due to the loss of one time funding sources. Even if the current trends continue state leaders are still looking at standstill budgets for the next fiscal year. 

Board of Equalization funds OHLAP, but designates use of agency reserve

By Patrick B. McGuigan at CapitolBeatOK.com (Published: 20-Dec-2011) 

The Oklahoma Board of Equalization (BOE), chaired by Governor Mary Falllin, met today (Tuesday, December 20) to fulfill statutory requirements to give preliminary certification to general revenues available for appropriation during the 2012 Legislature. The seven-member panel fulfilled its required function at its regularly-scheduled gathering, but also unexpectedly boosted anticipated funds available for general appropriation by $6 million. 

Mid-way through the meeting, during what was expected to be a routine discussion as prelude to BOE approval of $63 million for “Oklahoma’s Promise” scholarships administered by the Higher Regents, Treasurer Ken Miller asked staff about the program reserve fund. That’s when members of the Board were told the reserve was about $15 million.

(The Office of State Finance later confirmed the precise figure is $14,530,300.85, a sum that should increase when additional dollars are transferred shortly.) 

The information provoked discussion and introspection among members of the board. Legal counsel for the state government confirmed the BOE could approve less than the $63 million requested, but fully fund the program request by specifying that some of the reserve could be used for the difference. 

Miller and others on the board made it clear they supported “full funding.” At the same time, Miller articulated a view, apparently shared by every member, that “a more rational reserve balance” seemed in order. It was clarified in discussion with staff and counsel that the reserve may only be used for scholarship awards, and not for other purposes. 

In the end, state Auditor & Inspector Gary Jones moved, and Treasurer Miller seconded, a motion to fulfill the $63 million request for funding of the higher education scholarships, directing $57 million from general revenue and the remaining $6 million from the OHLAP reserve. 

Oklahoma Has Regained Nearly 60% of Pre-Recession Revenue

OKLAHOMA CITY – In spite of external threats, volatile markets and global instability, Oklahoma’s economy is rising above the chaos, State Treasurer Ken Miller said today as he released the state’s monthly gross receipts report.

“With yet another month of healthy collections, it appears Oklahoma’s economy is hitting its stride,” Miller said.

October collections were 7.4 percent higher than in October of last year, showing steady improvement in the state’s economy. Collections over the past 12 months are up almost nine percent from the previous 12 months.

Treasurer Ken Miller

Miller said gross revenue, a reflection of the state’s economic performance, has grown for 20 consecutive months.

“We have regained almost 60 percent of the revenue that disappeared during the recession,” he said. “We saw a more than $1.9 billion drop in 12-month receipts between December 2008 and February 2010. Since then, we have seen an increase of more than $1.1 billion.”

Oklahoma: A positive example

As world financial markets react to uncertainty in Washington, Europe and the Middle East, Miller said Oklahoma’s economy is setting a positive example.

“Oklahoma’s two major revenue streams, income tax and sales tax, are showing remarkable resilience,” he said. “Income tax collections – up by almost 12 percent this month – show Oklahomans are making more money, and sales tax collections – up by almost nine percent – show we are also gaining confidence.”

Miller said the latest Business Conditions Index for Oklahoma continues to reflect a positive outlook for the state’s economy. The index for October shows anticipated growth for the next three to six months.

Oklahoma Economic Report Released for October

State Treasurer Ken Miller has released the October edition of the Oklahoma Economic Report. 

Stories this month include:

• Guest commentary by Governor Mary Fallin
• Tax reform brewing
• Oklahoma economy shows steady growth
• First quarter general revenue exceeds estimate
• Gross receipts vs. General Revenue Fund
• Economic Indicators

Lawmakers Examine Possible Higher Education Savings

OKLAHOMA CITY (October 11, 2011) – If Oklahoma’s institutions of higher education and state government simply streamlined processes it could result in significant savings on behalf of the taxpayers, presenters told members of the House Higher Education Committee today.

The legislative study on Oklahoma’s colleges was requested by state Reps. Corey Holland and Jason Murphey after higher education institutions were successful in winning exemptions from several government modernization reform initiatives.

Of particular interest to the legislators is higher education’s ongoing exemption from the Oklahoma Central Purchasing Act. A 2006 consultant report from IBM found that the state could save millions of dollars by reforming its central purchasing system and by working with state colleges to leverage spending power.

While the Legislature acted on this report and enacted purchasing system reforms that are saving millions of dollars, the state’s centralized purchasing system has yet to include higher education institutions. It appears that millions more could be saved if state purchasing officials collaborated with Oklahoma’s universities and colleges.

Rep. Jason Murphey
R-Guthrie

Committee members were also told that another important savings opportunity could be realized if higher education’s OneNet fiber network would be consolidated under the state’s centralized technology infrastructure. This network could be used to lower to cost of bandwidth to state agencies and provide a solution to the state’s public safety interoperability challenges.

“As the government modernization effort continues to demonstrate tangible savings on behalf of the taxpayers, it becomes very important for Oklahoma’s policy makers to provide institutions of higher education with access to these money saving processes,” said Murphey R-Guthrie.

Rep. Corey Holland
R-Marlow

“At a time when Oklahoma families struggle to pay the ever-increasing cost of tuition and fees, it makes no sense for our state not to consider real cost savings,” said Holland, R-Marlow. “If by the colleges making some modernization reforms the cost of government for the taxpayers can be reduced, then I believe these reforms should be seriously considered.”