DALLAS — Oklahoma’s general fund revenue fell below expectations for the 10th consecutive month in October, but Treasurer Scott Meacham said the state’s economy may be poised for recovery, as the decline was not as steep as in recent months.
October revenue totaled $374.4 million, some $83.3 million less than estimated earlier and $116.1 million less than last October. Revenue was 18.2% below the official estimate, which Meacham called a positive after revenue for the first three months of fiscal 2010 were down 26%.
“I am cautiously optimistic that October collections could show our economy has finally bottomed and we may start seeing some recovery in actual revenue collections,” Meacham said when the revenue report was released Tuesday. “However, we will need to watch collections for a few more months to know whether the tide has truly turned.”
Total general fund revenue for the first four months of the current fiscal year, which began July 1, is $1.4 billion, which is $471.7 million less than the official estimate used to develop the budget for fiscal 2010 and $578.1 million less than in the same period of fiscal 2009.
The shortfall means that state agencies will have their budgets trimmed by 5% for the fourth consecutive month, Meacham said. Even with the reduction, revenue is not sufficient to maintain agency budgets at 95% of their legislative appropriation, Meacham said, and steeper cuts could be required later.
The state transferred $24.1 million in cash accounts to the general fund on Tuesday to keep the November cut at 5% or about $21 million, bringing the total cash transfers for fiscal 2010 to $155.4 million. The money must be returned before the end of the fiscal year, most likely from Oklahoma’s budget stabilization fund or from federal stimulus funds that the state had set aside for fiscal 2011.
Meacham expects that maintaining cuts of no more than 5% will require $600 million before the end of fiscal 2010.
Legislative leaders were not as sanguine, with Republicans in both chambers calling for quick and significant action to resolve the state’s fiscal problems.
House Speaker Chris Benge, R-Tulsa, said if revenue does not revive, the state could be facing a budget shortfall of $1 billion in fiscal 2011.
“There is nothing to indicate a reversal in our state’s economic trend anytime soon, which means we must be realistic as we work to ensure a balanced budget for this fiscal year,” he said. “But in the meantime, I think we need to prepare for the worst, batten down the hatches, and ride out this economic storm together.”
“Being proactive now will give us the flexibility to adjust funding levels with supplemental dollars if our economy recovers quicker than expected,” he said
Senate president pro tempore Glenn Coffee, R-Oklahoma City, said the state is running out of options.
“At this point, it is fantasy to think we can proceed forward without a serious look at each agency, and making real cuts in spending,” he said. “There is no rational basis to see things changing in the foreseeable future.”