OKLAHOMA CITY (AP) — A panel led by Oklahoma Gov. Kevin Stitt is expected to declare a revenue failure for the current fiscal year as plummeting oil prices and dwindling tax collections batter the state budget.
The Board of Equalization will meet early next week in a move that will allow the state to tap into some of the roughly $800 million in the state’s Constitutional Reserve Fund, commonly called the Rainy Day Fund, said Sen. Roger Thompson, chairman of the Senate Appropriations Committee. The state has another $200 million in a separate savings account.
Thompson, R-Okemah, said state revenue collections are expected to fall about $220 million short of projections for the current fiscal year that ends June 30, while the shortfall for next fiscal year is expected to be at least $415 million.
Oklahoma’s budget is based on projections of $54-per-barrel oil prices. Benchmark crude oil fell 17 cents to settle at $20.31 a barrel Wednesday.
Thompson said Oklahoma also is expected to receive about $1.5 billion from the federal stimulus bill, with about $844 million for the state and the rest earmarked for cities and counties.
“We are still looking at what the stipulations are for the use of that money,” Thompson said.
Thompson said the combination of state savings and the federal stimulus money should keep the state from laying off or furloughing any state workers.
Mike Mazzei, Stitt’s budget secretary, said he and legislative leaders agree that savings could be tapped to help finish the current budget year. However, he cautioned that the Oklahoma Tax Commission is still crunching numbers and that the actual budget hole this year could be more than $220 million.
Mazzei said a priority for the governor will be keeping agency expenditures flat and a robust savings account to help stabilize the state budget beyond the next two fiscal years.
“We don’t want to create the situation that happened back during the last oil drop when we had four years in a row of structural deficits,” said Mazzei, a former state senator.