Oklahoma's finance secretary says collections by the general revenue fund fell 9.1 percent below the official estimate in March.
Secretary of Finance Preston Doerflinger said Tuesday the state experienced another month of unusually low corporate income tax revenue. Doerflinger says that the decline followed a major increase in tax credit claims.
“We’ve had two tough months in a row now,” Doerflinger said Tuesday in a press release. “Unless April GRF collections exceed the estimate, minor appropriation reductions to agencies may be necessary for the remainder of the year. Cash flows remain sufficient at this point, but we’ll need a strong finish to the year because we’re about out of options after two weak months and a weak start to the year.”
March collections totaled $413 million, which is $41 million, or 9.1 percent, below the official revenue estimate upon which the fiscal year's state budget is based.
Doerflinger says March's weak collections rekindled the possibility of mandatory cuts for all state agencies for the budget year that ends on June 30.
State law requires mandatory appropriation reductions for all agencies if revenues are not sufficient to fully provide monthly allocations to all agencies for the entire fiscal year. Such a scenario is called a “revenue failure.”
Under state law, a 5 percent cushion is built in to the appropriated state budget to prevent revenue failures from occurring if revenues dip slightly below the official estimate. Sustained periods in which collections dip more than 5 percent below the official estimate put the state at risk of revenue failure.
Collections totaled $3.9 billion during the first three quarters of the current fiscal year. That's $215 million, or 5.2 percent, below the official estimate for the nine-month period.
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