The Board of Equalization last week announced that the revenue triggers necessary to invoke a tax cut have been met. The Board of Equalization approved a motion Thursday to certify the income tax cut trigger provisions of Senate Bill 1246. SB 1246 requires a comparison between Fiscal Year 2016 estimated general revenue to the Fiscal Year 2014 certified general revenue total. Because projected FY 16 revenue is $60.7 million more than FY-14 revenues, the personal income tax rate will be reduced from 5.25 percent to 5 percent in tax year 2016. This comes as further proof that conservative policies continue to work for Oklahoma despite what the naysayers say.
The estimates approved by the board project revenues that could be enough to also trigger a deposit of almost $37.8 million in the state’s Rainy Day Fund. Despite this, the Legislature could face budgetary challenges as the projections approved today are 0.3 percent or $25.6 million less than what was certified for last year’s budget. The recent drop in oil prices, although beneficial at the pump, could continue to put pressure on state revenues. Lower prices in agricultural commodity markets will also be a challenge for lawmakers to overcome beginning in February.
Every year new challenges face lawmakers as we begin the budgeting process. The challenges of fluctuating federal monies, off the top spending, and aging infrastructures force legislators to find new ways to craft a budget. Three measures I am introducing this year will force us to focus on true state priorities while planning for the future.
When revenues are uncertain, agencies will turn to fees as a steady source of income. The danger in this is agencies justify the spending before the legislature without the general public even knowing about it. Fee increases are seldom a large increase, but can quickly add up and be passed without many people knowing about it. I have a solid resume in voting against fee increases during my tenure in the legislature. I will be introducing legislation which was run unsuccessfully in 2013 by then Speaker of the House TW Shannon to put a three year moratorium on fee increases; allowing the budgeting process to be transparent. If increases are needed, the people of the state should know about it before it’s passed, not when they get the bill.
Over half of our state revenue is generated from the federal government. We see that number shrink and fluctuate every year, yet we have no plan to deal with the uncertainty of the federal government. I will be filing two measures dealing with how our state reacts to the federal money it receives. One measure seeks to require state agencies to make contingency plans for 5 percent to 10 percent reductions in federal revenues for every year’s budget. Doing so would allow us to be prepared and ready should the funds not be available. The second measure would establish the Federal Funds Commission to study and make recommendations on federal funding in a state’s budget, assess risks of a significant loss of federal funding, and contingency plans for continued services from the state in the event of a reduction of federal assistance. The commission would have members appointed by the Speaker of the House, President of the Senate, and the Governor to meet and make the needed recommendations dealing with federal funds.
The state’s budget is the largest issue we as lawmakers deal with every year. Our state cannot afford to not look at every option to make the process easier, more efficient, smarter, and stream lined. I look forward to working through these measures with my colleagues over the next several months.
It is an honor to serve you. It matters not if you are Republican, Democrat, or Independent; I am here to serve you. Communication is important to me. I want to know how to I can better serve and lead for our district and our state. I am always a phone call away at: (405) 557-7349.