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State revenue trend may be bottoming out

State revenue trend may be bottoming out

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by: BARBARA HOBEROCK World Capitol Bureau
Tuesday, November 10, 2009
11/10/2009 4:00:35 AM

OKLAHOMA CITY — State revenues are expected to remain down when Tuesday's revenue report for October is released, said State Treasurer Scott Meacham.

"I think we are going to see some improvement from the trend over the last number of months," Meacham said Monday. "I think we may be starting to see the first signs that Oklahoma's economy is bottoming out."

General revenue collections for September, the third month of the 2010 fiscal year, were $433.9 million or 30.1 percent below the prior year, and 29.2 percent below the official budget estimate.

State agencies have been told budget reductions of 5 percent a month will continue through the end of the fiscal year June 30 due to declining state revenue.

"Pretty much across the board in major revenue category, they (revenues) weren't up, but just not down as far as they have been," Meacham said.

But deeper cuts are still possible if revenue declines further, Meacham said.

David Blatt is director of policy for the Oklahoma Policy Institute, a think tank that works on budget and tax policy issues.

"Certainly, we hope that that is correct and we are in fact starting to rebound somewhat from the bottom," Blatt said. "Even if we are, given how far down we have been in the first quarter of the year, it seems unlikely we are going to be able to get through this year without some very difficult decisions about how to make up for shortfalls."

The Oklahoma Policy Institute on Tuesday is going to release its projections, Blatt said.

"We are projecting that for the year that shortfalls are likely to be about $700 million," Blatt said. "So even if the Legislature uses the full amount of the 'rainy day' fund, you are looking at cuts equivalent to about 6 percent across the board."

The rainy day fund has about $600 million in it.

"It would be over the course of a full year — the remaining shortfall — even with using the rainy day fund that can be used," Blatt said. "You still end up with shortfalls probably more than 5 percent. That is our forecast."

Barbara Hoberock (405) 528-2465

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