Officials revise estimates of income, sales tax growth

Journal Record, The (Oklahoma City), Feb 15, 2001

OKLAHOMA CITY (JR) -- Original estimates for income and sales tax growth have been revised downward as Oklahoma's economy has slowed, senators were told Wednesday.

Tony Hutchison, Senate Economic Research and Policy Analysis Division director, told the Senate Appropriations Committee that employment and salary growth and consumer and business purchasing have both lagged. He said that service-sector purchases are projected to remain strong, but most services are not taxed in Oklahoma. Although the corporate income tax estimate has not been revised, Hutchison said, this preceded impending layoffs at several plants and the potential sale of the Oklahoma City Lucent Technologies plant.

Hutchison pointed out that about 40 percent of the projected $297 million in growth revenue previously predicted for the fiscal year starting July 1 was predicted to come from natural gas severance taxes. "This could change pretty quickly," he said.

Latest estimates show natural gas prices moderating downward from about $9 per thousand cubic feet to below $7 per mcf, Hutchison added.

In January, the State Equalization Board estimated that lawmakers would have $297 million more available for appropriation than last year. They can also tap up to $78.7 million of the constitutional reserve or "rainy day" fund, for a total of $376.5 million in additional funds. However, as senators were reminded by Amanda Paliotta, Senate fiscal staff director, budget-writers already face some $222.7 million in prior obligations that must be funded, plus requests for $91.2 million in supplemental appropriation and more than $450 million in other agency and program requests.