Saying he’s “cautiously optimistic,” State Treasurer Scott Meacham says Oklahoma’s revenue shortfall continues, but better news may be on the horizon.
“This is the first time in 10 months I’ve stood before you with the news that last month’s shortfall wasn’t as bad as the previous month,” Meacham said during a state Capitol press conference Tuesday.
“One month doesn’t necessarily make a bottom, but it’s better than where we’ve been recently. Hopefully this one-month trend will continue,” Meacham 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.”
Preliminary reports show General Revenue Fund collections last month were $374 million dollars, which is $116 million below the prior year and $83 million below the estimate. In order to fund the reduced allocations in October, the state transferred an additional $24 million dollars from cash funds. Those transferred funds will have to be repaid, most likely from Rainy Day Funds, by the end of the fiscal year.
“Governor Henry has guarded the Rainy Day Fund throughout his terms in office. But the loss of senior nutrition programs, furloughs in agencies like the Department of Corrections, and cutting core services means we have to find an appropriate balance. There are core services that must be kept in-tact, and if we have to use a portion of the Rainy Day Fund that’s what it’s there for,” Meacham said.
Last month Governor Henry announced that five percent cuts will remain permanent for all agencies throughout the remainder of the fiscal year, but Meacham says they have also told agencies to prepare for deeper cuts, just in case. He says next month should be a better indicator of how the rest of the fiscal year will play out.
The holiday shopping season could be beneficial to state revenues, Meacham says, but the real boost will come from natural gas prices this winter.
“I think as we go into the winter months natural gas prices should help our revenue. We have had a tremendous supply of natural gas in reserve, so if the winter is harsh, particularly in the east, that could help our picture.
“Several years ago we were praying for rain,” Meacham said. “Now we need to be praying for snow, sleet and ice in the northeast.”