Revenues getting better, but ‘tough decisions remain’
By Patrick B. McGuigan
Oklahoma state Treasurer Scott Meacham unveiled the April government revenue report today (Tuesday, May 11). In a generally upbeat presentation, he said Oklahoma’s economy is getting healthier.
He commented, “Some of this is following a pattern. The sales tax is rising and that’s a good sign. My belief is that it tends to be a lagging indicator. The sales tax lagged on the way down and it is lagging on the way up, as well.”
Noting that three of four major revenue categories had improved, Meacham reflected, “The income tax was down in personal collections, but corporate income taxes were up. The estimated tax payments were down, but those are generally based on the prior year’s performance, so that wasn’t a surprise. It actually makes sense. Withholding is down slightly. What all this adds up to is a mixed, not a negative, message.”
Meacham continued, “We have now paid back most of what was borrowed from the reserves and what is owed. The data we have is consistent with the picture of a recovering economy. Things are improving but it’s slow. We need more growth in revenue to gain back ground, but growth will stay in the 2-3 % range until natural gas prices go up.”
Treasurer Meacham said negotiations among Gov. Brad Henry, President Pro Tem Glenn Coffee and House Speaker Chris Benge “have continued daily, and in fact almost around the clock in last few days. We were making progress when the sirens went off.” The latter was a reference to tornadoes that jumped around the central Oklahoma area yesterday.
The treasurer confessed negotiations continued for a few minutes after sirens warned of the severe storm activity in Oklahoma County yesterday afternoon. As Meacham spoke this afternoon, Gov. Henry was in Choctaw, east of Oklahoma City, touring devastated buildings along Interstate 40, where a strong tornado struck yesterday.
Meacham said “We are very close in the budget negotiations but I worry if we don’t get it done soon, we’ll be looking at a special session. It would certainly be helpful to get it done this week; if we could all know where we stand, exactly what the basics of a deal are, this week.”
He told reporters the “sticking point” is “cuts and allocation of cuts,” including in education. Meacham said, “We still have some distance between us.”
In prepared remarks, Meacham said, “It’s not quite time to sing ‘Happy Days are Here again,’ but we are seeing signs of recovery in Oklahoma’s economy.”
Benge and Coffee each released cautious but hopeful reflections not long after the treasurer’s meeting with reporters.
In a statement sent to CapitolBeatOK, President Pro Tem Coffee said, “We are beginning to see positive signs within Oklahoma’s economy. Our revenue numbers are slowly turning around, indicating an increasing consumer confidence, which is encouraging. But we are still a long way from the end of our budget challenges and we will keep this in mind as we continue to craft the FY 2011 budget.”
For his part, Speaker Benge commented: “Today’s numbers make me hopeful that we have in fact seen the bottom of this economic downturn. However, these numbers do not change the fact that we have a large budget deficit we have to address right now, which means tough decisions remain.”