The State Board of Equalization met Thursday to certify state revenues for Gov. Mary Fallin's budgeting ahead of the next legislative session and fiscal year. Oklahoma has enough revenue to trigger an income tax cut.
The amount of money available to fund state government is trending flat, but officials say lackluster revenues seem manageable.
About 1.7 million Oklahoma taxpayers pay the top income tax rate, which will drop a quarter point — from 5.25 percent to 5 percent — in 2016. There was worry recently that the tax cut wasn’t coming. That’s because it’s triggered by growth in state revenues that often rise and fall with the price of oil.
“We're hoping that this will be a temporary, short-term drop in the price of a barrel of oil,” Fallin said. “But that's hard to predict, so we're being cautiously optimistic in planning that there might be a potential slump in the economy. And we don't think it will be a big slump, but a possible slump in the economy because of this."
At $56 a barrel, the price of crude is the lowest it’s been since 2009.
Oklahoma’s finance secretary Preston Doerflinger says the income tax cut trigger was exceeded by approximately $60.7 million.
Current estimates project a $6.9 billion budget for Oklahoma in 2016 — roughly 4.1 percent less than last year.
"What we can do as a state is to adjust our revenue projections, warn our agencies that there could be reductions in the amount of revenue available beginning in 2016, in the fiscal year, and to be prepared to take slight reductions in their budget itself,” Fallin said.
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