Tulsa World: Treasurer hopeful as revenues drop

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Treasurer hopeful as revenues drop
Scott Meacham says the smaller 18 percent shortfall in October may mean that the worst is finally over.

By BARBARA HOBEROCK World Capitol Bureau
Published: 11/11/2009 2:21 AM
Last Modified: 11/11/2009 4:32 AM

OKLAHOMA CITY — State general fund revenues fell far short of projections for a 10th straight month in October, but state Treasurer Scott Meacham tried to read that as a hopeful sign.

"I am cautiously optimistic that October collections could show our economy has finally bottomed and we may start seeing some recovery in actual revenue collections," Meacham said Tuesday.

Although revenue in the first three months of the fiscal year fell a total of 26 percent below the official budget estimate, October's shortfall was 18 percent alone, the treasurer said.

"Coupled with other positive national economic indicators, I am hopeful that with today's revenue report, we have seen the bottom of the recession in Oklahoma and that recovery will begin in the next few months," Meacham said. "However, we will need to watch collections for a few more months to know whether the tide has truly turned."

Preliminary reports released Tuesday show that general revenue fund collections in October were $374.4 million or 23.7 percent less than the previous year's and 18.2 percent less than the estimate.

For the first four months of the fiscal year, collections total $1.4 billion, which is 28.1 percent less than the previous year and 24.2 percent less than the estimate.

The gross production tax on natural gas produced $23.6 million for October, which was 69 percent less than the previous year and 54.5 percent less than the estimate.

State revenue will pick up if energy prices rebound, Meacham said.

State agencies have been told that 5 percent monthly reductions in their budgets will continue through the 2010 fiscal year, which ends June 30. Deeper cuts are possible, Meacham said.

Gov. Brad Henry said the cuts that already have been made have taken their toll on state services.

"Those reductions have already forced a number of painful actions, from cuts to the senior nutrition program to furloughs at critical agencies such as the Department of Corrections," Henry said.

"And unfortunately, agency heads report that more difficult reductions are on the way."

If the current trend continues, the state could be facing as much as a $1 billion shortfall for fiscal year 2010, said House Speaker Chris Benge, R-Tulsa.

Further cuts must be considered now, coupled with use of money from the state's "rainy day" fund, Benge said.

"Being proactive now will give us the flexibility to adjust funding levels with supplemental dollars if our economy recovers quicker than expected," he said.

"But in the meantime, I think we need to prepare for the worst, batten down the hatches and ride out this economic storm together."

Barbara Hoberock (405) 528-2465
barbara.hoberock@tulsaworld.com By BARBARA HOBEROCK World Capitol Bureau

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Some reader comments for this story were copied from "Oklahoma's October revenue fails to meet state's estimate," which was published on 11/10/2009.

	Report Comment golfer4life, Tulsa (11/10/2009 7:34:16 AM) Time to tap into the "rainy day" fund. The only reason I can see them not wanting to do so is perhaps there is not as much there as we are led to believe...
	Report Comment rc3251, Wilburton (11/10/2009 9:18:53 AM) I heard Scott Meachum speak last month, and he said they are going to tap in to the Rainy Day fund, but there will still be more cuts to come.
	Report Comment focuses, (11/10/2009 9:55:58 AM) Revenue down 30% but cuts of only 5% appear to be less than responsible. The rainly day fund is 600 million as I understand and the decreases in revenue exceed 100 million per month. The 600 million will not go far.
	Report Comment Arbythree, Tulsa (11/10/2009 2:58:58 PM) Horrible! How can we miss estimates 10 times?
	Report Comment DirtyWhiteHouse, (11/10/2009 3:29:40 PM) ohhhhh but these state legislators - they have got the cadillac insurance policies, while they burden the lowest paid teachers in the country with outrageous premiums, little family benefits, and double the amount of copays!!
	Report Comment I'm Reliable, (11/10/2009 3:41:10 PM) All the Republicans in Oklahoma must be jumping for joy. Republicans have always preached for smaller government and cutting government spending now they WILL get their wish. Let all the seniors starve as the government closes all senior nutrition programs!!
	Report Comment thehero, (11/10/2009 5:24:27 PM) Glad to see the Meacham is so optimistic about State revenues. We only had an 18.2% shortfall this month. While gross production tax collections are the major source of the shortfall, the personal income tax collection shortfall is second. Corporate income tax collections actually increased this month. Once again, these personal income tax numbers, regardless of what the D.O. will say, continue to indicate that the tax cuts are having a negative effect on State revenues. What also concerns me is that we have been borrowing from other funds just to keep the cuts at 5% per month. It will already take over a third of the maximum amount allowable to be taken from the Rainy Day Fund just to pay back these other funds. If the shortfall continues, the State will be hard-pressed to keep the cuts at just 5%, which is on top of the 7% cut most State agencies took to start the year. It is now time for the Legislature to act and call a Special Session to address the shortfall. We pay them $38,400 per year to do the job we elected them for. This is not just for 3 months out of the year. If not, agencies will continue to cut services and continue to furlough and RIF State employees. Waiting another three months on promises is not the way to conduct the State’s business.
	Report Comment thehero, (11/10/2009 5:25:31 PM) Sorry, D.O. is the Daily Oklahoman.
	Report Comment Thunder196, Tulsa (11/10/2009 6:21:55 PM) rc2351 Are you referring the Meacham who said he didn't want to tap the rainy day fund because we might need it in 4 years? . He wouldn't know a gully washer if he was standing in it.
	Report Comment Miss Smart A., (11/10/2009 7:03:20 PM) why don't the people who have been laid off, with all the extra time on their hands, just go shopping? that would increase the amount of taxes collected, right? why should Meacham use rainy day funds? it's not raining in his world
	Report Comment oldrustytulsa, Tulsa (11/11/2009 5:58:44 AM) So when your wrong ten out of ten times thats a good thing?, Right?.... Wrong. Get another job.
	Report Comment fld11, (11/11/2009 11:36:18 AM) This guy's a complete idiot and his attempt to spin bad news into good news to sway public opinion isn't working. He needs to go away.
	Report Comment Ron Ballew, Lawton (11/11/2009 9:34:04 PM) If projections are wrong, get a new projector.

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