Editor’s Notebook: State’s professed tax revenue woes, Utah’s revenue joys, and signs that God loves us
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Published: 11-Dec-2014

From an editor’s notebook, a promised reduction in state income taxes could be thwarted by the rapid fall in oil and gas prices (and consequent reductions in gross production tax revenues for the government), and the state of Utah is poised to enjoy a relatively robust spending environment in 2015. In both states, pressure for increased government spending is intensifying.

And, beer distributors last week celebrated the end of Prohibition, 81 years ago this month. Which will bring us to Benjamin Franklin.

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Oklahoma Secretary of Finance and Revenue Preston Doerflinger says state government revenues subject to appropriate may not leave enough room for implementation of a reduction in the state income tax. Gross Production Tax revenues (the levy on oil and natural gas) fell below prior year collections last month, dropping 5.3 percent ($3.72 million).

Problematic for Oklahoma budget planners is that the data reaches all the way back to September, when oil was $93 a barrel – and that was weeks after a $106 a barrel high in June.

The State Board of Equalization will meet Thursday (December 18) to project revenues for FY 2016 (July 1, 2015 to June 30, 2016).

Among other pressure points, demands for increased spending in the Capitol precincts are coming from public school administrators and employees, 

Department of Corrections officials and employees, and from various health care spending advocates.

Meanwhile, the state Treasurer’s Gross Receipts to the Treasury report found last month’s receipts were down $11.78 million, or 1.4 percent year over year.

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The state of Utah anticipates $360 million in new tax revenues to apportion during the 2015 legislative session, which beings in January. The Utah Executive Appropriations Committee got the word on Tuesday (December 9).

Bottom line, revenues are estimated to grow by 6.5 percent ($357.4 million, to be precise). In combination with that, legislators will have $112 million in one-time surplus funds from Fiscal Year 2014 (which ended June 30), and $148 million in projected surplus from Fiscal Year 2015.

The total boost available for the Utah solons, in increased or one-time money, is $617 million.

Some of the same broad interests calling for increased state spending are the same in Utah as in Oklahoma. In Utah, education, road building and water development are among the loudest voices calling for more spending, UtahPolicy.com reports.

Anticipating the start of a 45-day session in the New Year, Utah’s Majority Republicans voted to keep $116 million of the income growth in reserve, saying they will decide later whether to put that into the state’s Rainy Day Fund or use it for road or other construction projects.
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On a happier note, Oklahoma’s beer distributors last Friday (December 5) celebrated the 81st anniversary of ratification for the 21st Amendment. That is the U.S. Constitutional provision that repealed Prohibition and established, in the words of a press release from the Beer Distributors of Oklahoma, “today’s effective system of state-based alcohol regulation.”

In a press release to CapitolBeatOK and other news organizations, Craig Purser (CEO of the National Beer Wholesalers) said, “For more than 80 years, Americans have benefited from a system of state-based alcohol regulation that balances robust competition with local social norms and community desires. 

Today, consumers of legal drinking age have access to thousands of different brands and styles of beer – from small regional craft brews to large multinational labels and imports from around the world – all delivered through a safe, transparent and accountable system.” 

Purser, a Tulsa native, continued, “America’s modern system of alcohol distribution works to protect the public and provide consumers with unparalleled choice and value.

“The one-size-fits-all federal ‘solution’ of Prohibition proved to create more problems than it solved – like the growth in organized crime and an underground black market for alcohol. Contrast that to the 21st Amendment, which recognized that alcohol is a unique product best controlled by individual states and provided a solution that continues to be effective today.”

Brett Robinson, another Oklahoman, commented, “Oklahoma’s independent, licensed beer distribution facilities, along with nearly 15,000 Oklahoma jobs associated with the beer industry, generates over $200 million annually in personal, business, federal, state, local and consumption taxes. Operating under a state-based regulatory system, Oklahoma’s independent beer distributors create great jobs and provide choice and value to consumers in communities all across Oklahoma.”

Robinson, president of the state’s Beer Distributors, circulated to news organizations an economic analysis of the impact of beer distribution systems, entitled “America’s Beer Distributors: Fueling Jobs, Generating Economic Growth & Delivering Value to Local Communities.” 

Advocates of beer over other adult beverages often attribute to Benjamin Franklin, the genius inventor and American Founder (and noted journalist) as observing, “Beer is a sign that God loves us, and wants us to be happy.”

Actually, Franklin’s words of wisdom, contained in a letter to a friend (French, no less) translate as these: “We hear of the conversion of water into wine at the marriage in Cana, as of a miracle. But this conversion is, through the goodness of God, made every day before our eyes. Behold the rain which descends from heaven upon our vineyards, and which incorporates itself with the grapes to be changed into wine; a constant proof that God loves us, and loves to see us happy!” 

We will save that debate over Spirits for another time.

Perhaps during the evening of Dec. 18, a few hours after the state Board of Equalization meeting ends.

You may contact Pat here: patrick@capitolbeatok.com .

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