By Rep. Mike Sanders
The latest revenue reports for the state contain some very good news. Collections are up, and companies are hiring. All signs are positive for the economy.
According to the latest state treasurer’s report, December collections to the state treasury were $1 billion – up $107.9 million, or 12 percent – compared to receipts from December 2016. During 2017, gross receipts were $11.45 billion – 6.2 percent, or $667.6 million – above 2016 collections.
The state showed across-the-board growth in every major revenue stream – income tax, gross production tax, sales tax, motor vehicle taxes and other sources. Monthly receipts were up 11 out of the past 12 months.
Allocations to the state’s General Revenue Fund also are improving. November GRF allocations exceed the estimate by 14.1 percent. Fiscal-year-to-date collections are ahead of the estimate by 9.4 percent. The General Revenue Fund is used by the Legislature to appropriate money for core government services such as transportation, public safety, health care and education. So this is good news for our roads and bridges, our police and fire departments, our rural hospitals and nursing homes and our schools.
The Tax Commission attributes $24.2 million in December to new revenue resulting from legislation enacted during the last regular session. The additional revenue comes primarily from changes in sales tax exemptions and gross production incentive tax rates. The new revenue accounts for 22.4 percent of the growth in December collections compared to the prior year.
In addition, the state’s unemployment rate is down, and state jobless numbers have improved. Many companies report they are hiring. The Oklahoma Business Conditions Index shows anticipated economic growth during the next three to six months. Oil and gas prices are up as are active rig counts – important for a state still heavily reliant on energy to fund many services for our citizens. New wind projects are in the works. Retailers are reporting positive sales over Christmas.
After several years of recession and budget decline leaving gaps in funding from one budget year to the next, this sustained positive revenue and job growth is terrific news. If revenue growth continues, we could end the fiscal year with no budget hole. This is so different from the doom and gloom diet we’ve all been fed for the past year.
The Legislature will still need to consider how to pay for teacher pay raises as well as restore funding to transportation, public safety and health care. But, I can assure you that any revenue proposals put before the Legislature this year will be attached to specific reforms and will come with accountability measures for our state agencies.
I want to address the narrative that the Legislature for too long has relied on one-time funding sources to balance the state budget. It is true, that during the recent recession we relied on using our Rainy Day Fund or the state’s Special Cash Fund or some of the state’s 1,100 revolving funds to fund core services. This is not unlike a family, though, who puts money aside for emergencies. Would they rather spend that money on a new car or a family vacation? You bet, but if they need to use it to buy groceries or pay bills during an illness or a stint of unemployment, they’ll do that before they consider asking someone else to bail them out.
More work still needs to be done, but these indicators are positive and this is great news for our state.
On a final note, be on the lookout for my annual citizen opinion survey, which should reach you in the next week or two. This gives you the opportunity to tell me what issues are most important to you. Please take a few moments to fill this out when you receive it and get it back to me. I really do rely on your input to help me represent you.