State lawmakers are currently discussing the budget picture as we prepare to begin the legislative session in February. The budget forecast is difficult but not insurmountable. We had a budget hole last year that we filled with one-time revenue sources. This year we will fall back to the standard sources and that will mean we need a new strategy.
The Oklahoma State Board of Equalization has estimated that we will have less revenue growth for the fiscal year that begins July 1, 2015. This is due to the recent drop in oil prices and lower prices in agricultural commodity markets. Combined with that lack of revenue growth are other factors such as the loss of one-time revenue sources. The state’s overall projections and agency budget requests for this fiscal year were off from available revenue by around $300 million, but we are facing an actual deficit of around $25 million.
Tax cut critics are going to overlook the factors I have described above and simply say, look, they cut taxes, and now we have less. The truth though is that tax cuts have led to revenue growth. However, as the revenue has grown so has our funding needs for education, transportation and public safety. We have cut some non-essential spending, but to balance our budget, we need to continue to prioritize better.
This year, Speaker Jeff Hickman is already discussing reductions to tax incentives that the state gives to special interests. I agree overall with the goal of these incentives. Many were created in order to attract or keep business in the state. Specific oil and gas incentives have been proven to be highly effective. However, over time, we have seen that most do not give us a proper return on our investment. Currently our state gives around $1.7 billion every year in credits, subsidies and incentives. We need to make sure every penny is spent wisely and is being used effectively to actually attract or keep business in our state and not just be given away.
We are also discussing change the way in which we craft the budget. A constitutional amendment has been filed that would make one session a budget-only session every two years. There has been vocal support for this plan by the governor. A second proposed change would allow us to focus on needs rather than how much we want to add to current expenses. We basically start from last year’s budget when we build the next year’s budget and this would have us go back to the drawing board and make sure we do not waste money on programs that are no longer a high priority.
As your state representative this year, I will work to reduce tax credits and incentives, provide adequate funding for high priority needs and improve the budget process.
It is an honor to serve you. It matter not if you are Republican, Democrat, or Independent; I am here to serve you. Please visit my policy blog at www.RepJoshCockroft.blogspot.com. 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. You can also email me at: Josh.Cockroft@okhouse.gov.