Summit Gives Bleak Outlook on Oklahoma Budget
A budget summit in Oklahoma City hosted by the Oklahoma Policy Institute gives a bleak outlook for the state's short-term and long-term budgets.
Anew legislative session begins in just over two weeks. Lawmakers will head back to the capitol facing a $170 million budget shortfall. Oklahoma Policy Institute Director David Blatt hopes the summit paints a clear picture of what that shortfall and the policies that lead to it mean for the state.
"In particular, what challenges are ahead of us and what might be the most sensible approaches for trying to manage what are looking to be another round of tough budget times," Blatt said.
The good news is Oklahomans pay one of America's lowest total tax rates: $8.41 for every $100 earned. But that's also bad news.
The rates were already low when they were cut, and the cuts cost the state billions of dollars in revenue since 2004. Blatt said fixing the problems caused by those cuts and other policies will be a marathon, not a sprint.
"And we'll never entirely get to the finish line as far as coming up with the right mix of taxes and the right programs, but the approach we've taken over the last several years as been very one-sided," he said.
Other than income tax cuts, problems summit speakers said need to be addressed include too-generous tax breaks for oil and gas producers, an outdated sales tax and inflexible spending rules.
The state faces a structural deficit. That means the state's normal revenue growth can't keep up with expected spending increases. Revenue also hasn't returned to pre-recession levels.