State Leaders Discuss Revenue Failure
Oklahoma budget officials this week sounded a dire financial alarm: Low oil prices have driven state government revenues to failure. Three of the state’s top finance leaders met with reporters on Thursday to detail the shortfall.
Crude oil has dipped below $35 a barrel, the lowest price since February 2009 — the last year a revenue failure was declared in Oklahoma. Plunging oil prices are pulling down nearly every one of the state’s major sources of tax revenue.
The total estimated budget hole: Around $1 billion.
“When one out of every four or five dollars the state collects is associated with the oil and gas industry and that industry sees the price fall 70 percent, when there are 11,600 Oklahomans are out of work and have lost their jobs, the effect is going to be profound,” says State House Speaker Jeff Hickman.
Funding for agencies will be cut across-the-board for the remainder of the fiscal year. Some agencies could be consolidated, others are considering voluntary employee buyouts. The budget hole is expected to grow before the Legislature convenes in February and could be even larger next year.