Share story

OKLAHOMA CITY (AP) — Despite some economic growth and increased revenue from new laws passed this year, Oklahoma finance officials projected on Wednesday that lawmakers still will face a budget hole next year because of how much non-recurring revenue was used this year.

The Board of Equalization led by Gov. Mary Fallin certified that lawmakers will have about $5.7 billion available to spend on next year’s budget. But finance officials warned the state’s budget picture is still hazy because the Legislature hasn’t finalized the current year’s state budget.

Shelly Paulk, deputy budget director for the Office of Management and Enterprise Services, said Oklahoma’s economy is slowly recovering but that a shrinking tax base, and particularly sales tax collections, will continue to pose revenue challenges for legislators moving forward.

“The dwindling tax base is concerning because it means Oklahoma cannot grow out of the state revenue crisis in the near future,” Paulk said.

Paulk said general growth in Oklahoma’s economy is projected to generate about $60 million. Laws passed by the Legislature this year to end certain tax incentives on energy production and boost the tax on some items such as vehicle purchases, are expected to generate another $300 million for next year’s budget.

But Paulk noted Oklahoma lawmakers used more than $500 million in non-recurring revenue, like agency savings accounts and the state’s constitutional Rainy Day Fund, to fund this year’s budget. She also pointed to nearly $300 million in new obligations the state will face in next year’s budget, including the loss of federal funding for the state’s medical teaching hospitals ($62.8 million), an increase in benefit costs for teachers and state workers ($28 million), and debt service on state bond issues ($20 million), among other things.

Fallin, who led Wednesday’s meeting, has been meeting with legislative, civic and business leaders to try and develop a package of tax increases that could provide recurring revenues to stabilize the budget. She said she expects to call the Legislature back into a third special session sometime next month to make final adjustments to the current fiscal year budget and possibly consider some revenue generating proposals.

“We have balanced our budget by using one-time funds, revolving funds, raiding various cash funds, Rainy Day funds, to the point that we can’t do that any longer,” Fallin said. “It’s becoming a crisis in the state of Oklahoma.”


Follow Sean Murphy at