General Revenue Fund collections for fiscal year 2016 are forecast to increase, tripping the trigger for an individual income tax rate cut in calendar year 2016, Secretary of Finance, Administration and Information Technology Preston Doerflinger announced Wednesday.
Total revenue available for appropriations for the next fiscal year, however, is forecast to decline by nearly $300 million, he said.
Under Senate Bill 1246, which lawmakers approved during the 2014 legislative session and Gov. Mary Fallin signed, the state’s top personal income tax rate will drop from 5.25 percent to 5.0 percent beginning Jan. 1, 2016 if the FY2016 General Revenue Fund estimate made by the Board of Equalization at its meeting Thursday is equal to or greater than the FY2014 estimate approved in February 2013.
According to the estimate to be presented to the board Thursday, the FY2016 estimate will be $60.7 million more than the FY2014 estimate.
Even thought the FY2016 estimate is more than the FY2014 estimate, Doerflinger said the total amount of money available for the FY2016 budget will be $6.9 billion, which is $298.1 million or 4.1 percents less than the state’s budget for the current fiscal year. That amount includes money in addition to the General Revenue Fund.
House Speaker Jeffrey W. Hickman commented on the early revenue projection numbers which will be considered tomorrow by the Oklahoma Board of Equalization, saying,
"The estimate to be considered of $60.7 million more than last year shows the continued strength of our economy. The growth is not only enough to trigger a cut in the state income tax from 5.25 percent to 5 percent, it is more than enough to cover the $48 million that Oklahoma taxpayers will get to keep in 2016. The current and hopefully short-term price of oil, and the ongoing drought that continues to impact the agriculture sector of our economy, are reminders to us that the additional funds typically used to supplement the general revenue fund may not always be there at the levels seen in recent years. Like Oklahoma families and businesses do every day, state agencies should be making preparations now, in their current budgets, for fewer dollars in next year's budget."
The Tulsa World reports that John Estus, a spokesman for the Office of Management and Enterprise, says, the average income tax reduction in 2016 is $85."
The story also indicates Doerflinger said another $10 billion in federal and other grants will boost the FY2016 budget to about $17 billion but that some state agencies would have to cut their budgets "to boost spending in targeted areas."
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