Meacham: No tax reductions this session

MOORE— A $114 million hole in the state's budget will put the kibosh on any tax reduction plans for this year, the governor's chief budget negotiator said Wednesday.

Speaking to members of the Moore Rotary Club, state treasurer Scott Meacham said the $114 million hole presents a challenge for state lawmakers, but said the budget picture "wasn't as bad as it was in 2003."

"In 2003 things were a lot worse," he said. "We were looking at a $700 million hole."

But while Meacham said the state's financial picture wasn't rocky as the past, he said Oklahomans shouldn't expect new tax reductions this year. "I don't see any tax reductions right now," he said. "I believe we're looking at a maintenance type budget."

Meacham said that "maintenance budget" would include little, if any, new spending and would probably fund most state agencies at their current level. This year's budget probably wouldn't incude tax reductions, increases in pay for teachers or state employees or other spending initiatives.

"It's not a standstill budget, because I think we'll be able to adjust some things for inflation," he said. "I expect it will just be a maintenance budget."

Last week, Meacham said preliminary financial reports show the state's general revenue fund collections for February totaled about $303 million. That figure, he said, was 0.6 percent below last year and $26.9 million - about 8.2 percent - below this year's estimate.

"When the revenue loss from income tax cuts is factored in, Oklahoma's economy is showing growth. The trend of the past few months continues - the Oklahoma economy is expanding, just not as fast as during the past few years," he said.

Collections from three of the four major tax categories - sales, gross production and motor vehicle taxes - exceeded the prior year by $19.1 million and were above the estimate by a total of $20.7 million.

However, collections from income taxes were below the prior year by $4.1 million and below the estimate by $20.8 million.
Meacham said "timing issues" were primarily to blame for the "less than estimated" income tax collections.

"Electronic filing of tax returns has sped up the rate at which refunds are being paid," he said. "We anticipate this month's income tax shortfall will balance out to a certain extent in the coming months."

Additionally, net income tax collections produced $40.7 million - about $4.1 million or 9.2 percent below the prior year - and $20.8 million or 33.8 percent below the estimate. Net income tax collections, he said, include personal income taxes and corporate income taxes less refunds paid for the month.

Personal income tax collections totaled $38.9 million for the month, short of the prior year by 3.3 percent. Meacham said those figures failed to meet the estimate by $19.6 million or 33.5 percent.

"This year's budget is a good lesson for all of us," he said. "It's a lesson on who we can all work together."

Along with any new tax proposals, Meacham said he "didn't expect" a bond issue to pay for roads and bridges. "I do foresee some type of bond issue," he said, "but not for transportation."

And while Meacham was critical of some lawmakers for "the partisan nature" of the state capitol, he said he expected bugets issues would be resolved.

"Again, things aren't as bleak as they were before. There are many areas where we can find revenue. And people always seem to work better together when there is little money to spend."