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October 14, 2013

‘Flat budgets’ possible for state agencies next year


Oklahoma’s top finance official warned state agency directors Monday to prepare for the possibility of flat budgets next fiscal year after a report showing collections this quarter to the state’s general fund trail those from the same time last year.
Oklahoma’s Secretary of Finance Preston Doerflinger released figures that show collections to the state’s main operating fund for the first three months of the fiscal year were down more than 4 percent compared to the same quarter last year. Collections also were down 6.6 percent in September compared to the same month in the previous year. Oklahoma’s fiscal year runs from July 1 to June 30.
“Ample time remains for collections to pick up, but it’s looking like the state may see tighter revenues than in recent years,” Doerflinger said in a statement. “Agencies should continue to keep their belts tight, find efficiencies and prepare for potentially flat budgets.”
Doerflinger attributed some of the decline to market uncertainty caused by the partial shutdown of the federal government that began at the beginning of this month, as well as an expected “softening” of Oklahoma’s economy.
Doerflinger reported first-quarter collections from all four major tax categories were below the official estimate, including the gross production tax on oil and gas production (down 33.4 percent), motor vehicle taxes (13.6 percent), income taxes (9.4 percent) and sales taxes (3.7 percent).
He said noneconomic factors also are responsible for the decline, including $60 million in income tax collections that will be diverted from the general fund this fiscal year to pay for Capitol repairs. Finance officials report the first $20 million of that total was diverted last month, and the remaining $40 million will be apportioned before June 30.
An additional $60 million is scheduled to be apportioned during the next fiscal year for the $120 million Capitol improvement project.

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