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Oklahoma budget may take $65M hit

Oklahoma budget may take $65M hit

Tax code provisions in federal package could complicate matters for state
Published: March 26, 2009

Oklahoma stands to lose $65 million because of federal tax code provisions in the $787 billion federal stimulus spending package, further complicating legislative efforts to overcome a budget shortfall.

That estimate by the Oklahoma Tax Commission has been given to state Treasurer Scott Meacham and legislative leaders.

The loss would be for the fiscal year beginning July 1. Revenues expected to come into the state already are expected to be $612 million less than for the current fiscal year.

"We already have a decrease in our appropriations authority of 8.7 percent, or $612 million. This would add to that,” Meacham said. Overall, lawmakers are trying to make up an estimated $900 million budget shortfall.

House Speaker Chris Benge, R-Tulsa, and Senate President Pro Tempore Glen Coffee, R-Oklahoma City, said they are trying to address the problem.

"It’s one more hit. It’s one more piece to this growing, complicated puzzle we’re trying to figure out how to balance at the end of the day,” he said.

Meacham said about $46 million of the potential $65 million Oklahoma tax loss is tied to federal tax write-offs on business equipment under the federal tax code’s bonus depreciation provision, which is being extended by the stimulus plan.

He said the state would lose about $7 million because it has an Earned Income Tax Credit program that is 5 percent of the federal tax credit program for the working poor.

The Legislature could "decouple” from the federal tax code changes, but Coffee said no decisions have been made on that.

Legislative budget-writers are getting help from $2.6 billion in stimulus funds heading to the state for a variety of state and local government programs. The biggest help on the state level is plugging a big gap in Medicaid funding and funds targeted for programs in education.

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