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State revenue estimate suggests a bleak budget year
Source: Office of State Finance
By MICK HINTON World Capitol Bureau
Published:
12/28/2007 1:53 AM
Last Modified: 12/28/2007 1:53 AM
OKLAHOMA CITY -- Gov. Brad Henry and state leaders said Thursday that they foresee only meager growth in state funding for roads, education, corrections and other programs after approving a revenue estimate reflecting only $32 million in new money for the Legislature to spend.
The preliminary figure was approved Thursday by the state Board of Equalization, which will consider a more definitive revenue estimate in February after the Legislature convenes.
The fiscal year 2009 revenue estimate represents an overall growth of only 0.5 percent, compared with more sizeable growth the past few years.
At the same time the economy is slowing, more tax cuts, including personal income taxes and standard deduction increases, are going into effect.
The state budget is estimated at $7.1 billion for the fiscal year that will begin July 1.
Henry said the challenge will be to meet expenses, rather than considering further tax cuts.
"It's premature to talk more tax cuts," the governor said. "We need to listen to statesmen like David Boren, who has publicly stated after two years of record tax cuts, we probably need to take a breath and step back and see what the full impact of the tax cuts are. I certainly would recommend that."
Boren, president of the University of Oklahoma, said several weeks ago that it would be unwise to cut taxes further instead of funding such things as education.
Both the governor and state Treasurer Scott Meacham were pessimistic that sizeable funding increases for roads can occur in the next fiscal year.
The Legislature has earmarked an automatic $17.5 million annual increase for roads but added a provision that this would jump to $50 million if there is sufficient growth.
"It would be very premature to say that that road trigger is definitely going to occur," Meacham said.
Budget projections are based on how well tax revenues are coming in to the state, with a major source being sales taxes.
"We think our December numbers are going to look particularly tough, given the ice storm," Meacham said. "We may come back in February and have to ratchet down some more."
Last session, the Legislature accelerated by a year a further reduction in personal income taxes. The tax rate in 2007 was 5.65 percent; for 2008, it will be 5.50 percent.
If the state economy had improved more, the rate would have decreased to 5.25 percent. But officials said Thursday that growth has not been strong enough for the further cut.
The Legislature and governor decided last session to make sure that funding for a free college tuition program, called Oklahoma's Promise, is provided before other obligations are met.
This year, the Legislature is setting aside $54 million to meet that commitment.
Some 17,400 college students now are receiving funds; that will increase to about 18,900 with the addition of 1,500 students next fall.
The program provides participants free college tuition to those whose family income is $50,000 or less. The students also have to sign up early in their high school years, maintain a 2.5 grade-point average and stay out of trouble.
State Superintendent Sandy Garrett said the budget picture does not bode well for schools, which already are having to make up for shortfalls in lottery funding.
So far this fiscal year, the schools have been shorted $4.6 million, she said.
Garrett said this means that schools would be shorted on the amount of money they actually receive to operate unless the Legislature can provide common education with supplemental funding during the coming session.
Mick Hinton (405) 528-2465
mick.hinton@tulsaworld.com
By MICK HINTON World Capitol Bureau
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Lori
, Tulsa (12/28/2007 7:38:08 AM)
How can this be? For several years the Tulsa World has printed glowing reports of job growth. And with oil over $90.00 a barrel shouldn't Oklahoma be getting a huge windfall? Someone is cooking the books. When will the Tulsa World look into this?
Report Comment
E T
, tulsa (12/28/2007 8:44:15 AM)
it's amazing how bleak the state looks to the tulsa world.maybe they have forgotten that they dumped hundreds of millions into the rainy day fund. the rainy day fund means you have been overtaxed. so how can it be bleak when the state has all this extra money not being used. Mike hinton and the tulsa world doesn't understand economics. all they understand is raising taxes cures everything. with that kind of thinking no wonder businesses are leaving our state and taking the jobs with them.
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WilliamTheArtist
, Tulsa (12/28/2007 9:16:55 AM)
We all knew the economy here was doing extremely well, and a good part of that was the result of oil which we cant rely on anymore. But what worries me is how the timing of this will effect teh cities hoped for ability to get some of that tax from the state to be collected locally for our roads. If projections keep trending downward, they arent going to want to give any back. All the money in the states rainy day fund wont even fix Tulsas roads.
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WilliamTheArtist
, Tulsa (12/28/2007 9:21:40 AM)
#2 ET, You say "all they understand is raising taxes cures everything... no wonder businesses are leaving our state.." What your saying doesnt make any sense. The state has steadily been lowering taxes.
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Michael Chasteen
, Tulsa (12/28/2007 11:27:03 AM)
Oklahoma is a freaking joke! Now we, without kids, are paying for everyone elses kids education. Weve always paid for their vo-tech out of our property taxes, but now we are paying for college. Have they not seen tulsa roads and bridges...? Bunch of redneck aholes run this state.
I own a company in which has 245 employees... we will be moving out of state next year!!!!
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Paul of Riverwood
, Tulsa (12/28/2007 12:09:22 PM)
Roads in Oklahoma will always be a problem; no other state has to have roads that can withstand single digits in the winter, over 110 in the summer and, the amount of moisture we get in the Spring, and the Dryness of our fall. Just learn where the potholes are and avoid them.
I would also consider a college education a matter of National defense, an uneducated populace wouldn’t be hard for some other country to take over. And although I do not know what line of business you are in #5, but I would doubt you are entirely a self made man.
Having only 245 employees you are no Bill Gates, but I will use Bill as an example. Bill Gates did wonders for the computer, but much of the knowledge he got was developed in universities, paid for by John Q. Public.
Look at all the people who have made millions over the internet, however self made they proclaim to be, they owe there success to the studies and experiments that were conducted at universities all over the country. Without the internet I doubt your company would be as successful as it is and you owe some of your success to tax supported universities.
With you it seems to be all about who gets the gettin’, and now that you got the gitten’ you don’t want to help someone else get the gittin’. Pay it forward buddy.
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Jim Purdy
, Tulsa, Oklahoma (12/28/2007 12:16:05 PM)
Michael Chasteen, are you really going to move to a state that doesn't invest in public education? And you don't need an educated work force? And your employees don't want good public schools for their children? That's amazing ...
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michael chasteen
, tulsa (12/28/2007 1:15:09 PM)
Do some research before your comments. Oklahoma ranks #48 in educated work force. We are the only state in which tax payers pay for vo-tech out of our pockets yet still have one of the worst work forces. These idiots want to invest in education for those who are going to college.. yet they forget about 1st through 12th grades. Think about it, then toss out your unintelligent comments.
I paid for my own college with hard work.. I dont intend to pay for some other families kids to go to college!
Maybe we should try to tax tulsans once again to put water in the river so the rich can come in and get richer... yeah, theres another ahole idea!
And yes, we will move to a state in which cares about its public education, which means 1st through 12th grades.. not one in which expects you to pay for college tuition. We cant even afford to pay our public school teachers... let's start there.
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jam
, tulsa (12/28/2007 2:34:51 PM)
The article by Mick Hinton is nothing but "Democrat speak"...translation: More taxes on the way for you dumb clucks!
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Paul of Riverwood
, Tulsa (12/28/2007 3:11:49 PM)
I would be interest to know what college Mr. Chasteen went to that recieved no state funding, Federal Grants, or private donations. That forces each student to pay exactly what that student uses.
Jam, would you rather do like Bush has, cut taxes and increase spending, he calls that expansionary economics. I wish someone would have called him out on that in his press conference last week. When we do that, Federal bonds have to be sold at a lower price and thus higher interest rate, which increases any interest rate that is tied to them, ie Credit cards and mortgages. It also forces local municipalities to pay a higher interest rate on bonds they are selling to pay for roads and K thru 12 education. It also leads to corporations making some risky decisions, because why would I risk getting 12% from a corporation when the government will guarantee me getting 8% on a T-Bond. So the officers of the corporations will take some risky decisions to get the stock up to 16%. This will cause inflation and I will have to pay more to put food on my table. So even though I will be paying less in taxes I will be taxed more.
Or we can expand K thru 12 to 235 days a year and force high school graduates to either go to vo-tech, college or the military, but they MUST learn a trade. More people will have jobs, the jobs that can be outsourced to other countries will be, but jobs that can’t will stay here in the United States. People who loose there job to outsourcing should be sent to vo-tech or college to learn a job that can not be outsourced. Because goods oversees will be made less expensive I will be able to buy more and because of the research and development that goes on at universities goods will be able to be made more efficiently and thus less expensive, and so T-bill rates will not rise, mortgage and Credit cards interest rates will not rise, I will get more bang for my buck, we will have an educated county capable of defending itself, and corporations will be able to make more money by doing things efficiently and not taking on undue risk and we will have low inflation and low unemployment.
Which would you rater have?
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Paul of Riverwood
, Tulsa (12/28/2007 3:23:38 PM)
A little about me I graduated top 5% of my high school class at the age of 18. At the age of 20 I had earned a BBA (a four year degree in 28 Months) in Finance from the Michael Price College of Business at the University of Oklahoma (one of the top business schools in the country) and was married. At the age of 21 I bought a house and had a child. I was LUCKY enough to have parents that could take out a home equity line of credit to pay for my school. I could not have done it without them, scholarships, the small amount the state does give the University (which covers about 22% of the university budget). I could not have bout a house for years if I did not have a college education.
I want everyone to have the same opportunity as me. I have been luckier in life than a great majority of people and at the age now of 22 my wife and I are considered upper middle class. It’s sad really. We don’t make much, but we get by allright, and our household income is twice the average in the state. Half the state lives on less than half of what we live on. Education can change that. And who knows maybe one of those kids that gets to go to college that normally wouldn’t get to without public assistance my develop something to fix Oklahoma roads.
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Barbie
, Osage county (12/28/2007 4:23:39 PM)
Check out KOTV and you will see that the Osage tribe is trying to compound this problem. They are taking a case to the appeals court allowing no state tax for members of the tribe living in Osage County. Our county is the largest in the state. Where will the funds come from to take care of the State roads the Osage Tribe drives on?
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jam
, tulsa (12/28/2007 7:38:27 PM)
Paul, at the ripe old age of 22, you still have a lot to learn about inefficient government. Bureaucrats never want to cut costs, just raise taxes to overcome the inefficiency.
We're throwing more money at education than ever before, with terrible results all over the country. Kids can't even be motivated to stay in school especially on the north side. These kids figure its easier to deal and use drugs than get an education and work for a living. The police can't even keep up with the gang-banging and drug-related crime in some areas. I'm not even going to get into the illegal immigrant freeloaders bankrupting our "free" social systems intended for US citizens.
You looney liberal, "tax and spenders" will never learn. You never met a tax you didn't like.
Paul, you and Barbie please feel free to pay my share also.
Report Comment
lynette
, tulsa (12/29/2007 12:45:47 PM)
Hmmm . . . another sad sales tax report. Wonder how long it will be before the xenophobe racists of Oklahoma realize how much "those illegals" were actually contributing to this economy?
Paul of Riverwood: a world class american; you talk about your own struggles and your good fortune and the fact that you have now, by any means of assessment, "made it," achieving the american dream at a tender young age.
And yet you, with all you've accomplished, want to extend a hand to others. Thank you for that.
I also recognize that I have been blessed by good fortune of birth, opportunity and personal qualities that were none of my doing. The combination has resulted in a "successful" life by the most common measures.
I want others to have the same thing. The generosity of spirit you've expressed here is one that I feel as well. Would that the majority in this state felt the same. We'd be far better off.
I don't believe we are really successful in this world until we're helping others move ahead too.
The rampant selfishness afflicting the spirit of Americans everywhere is disheartening. The common theme seems to be "I got mine, you get yours," with little recognition given to the fact that many of us have advantages others do not.
I am grateful for my good fortune. Sounds as if you are too. Let's spread it around . . . Lucky us, yes?
Report Comment
Jack Ash
, Tulsa (12/29/2007 9:57:32 PM)
#14 - You said "You're all just tops in my book..."
.
I guess that makes you a bottom or are you versatile?
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