DALLAS — Oklahoma lawmakers can appropriate up to $7 billion in fiscal 2014 under a revised revenue outlook adopted Thursday by the Board of Equalization.
The expected $7.05 billion in total available revenue is $214.6 million more than $6.8 billion available for allocation in fiscal 2013, which will end June 30. The state constitution limits expenditures to 95% of collections.
Gov. Mary Fallin said the increased revenue will allow another attempt to reduce the state's top personal income tax next year. However, she said, the proposed reduction will not be as significant as the failed effort to cut the top rate to 4.8% from the current 5.25% by the 2012 Legislature.
"We will be looking at further income tax reductions but not to the extent that we were looking at last year just because of the uncertainty," Fallin said. "It's increasingly clear that state agencies must be prepared to deal with budget cuts from the federal government."
She said federal tax negotiations are creating uncertainty among state budget writers.
"We don't know what Washington is going to be doing between now and the fiscal cliff, which is Jan. 2," Fallin said.
The revenue outlook, which was adopted unanimously by the seven-member panel, is the basis for the budget Fallin will propose when the Legislature convenes Feb. 4.
The Board will meet in February to adopt a final official forecast.
Finance Secretary Preston Doerflinger, who sits on the Board of Equalization, said fiscal 2014 will be the first time in five years that the state will have an appropriations authority of $7 billion.
The increase in expected collections includes $60 million in state income tax collections that would be generated if the Bush-era federal tax cuts are not extended by Congress.
"No one should get too excited about these figures just yet because everything is in a state of flux until the president and Congress come to an agreement," he said.
Revenue projections must be based on current law, Doerflinger said, so the estimate is based on the federal income tax structure that would be in place if congressional negotiations fail.
"Oklahomans would be hit with a double-whammy because state income tax withholding rates also would go up," he said. "That's because Oklahoma's income tax laws are tied to the federal system of allowable deductions and credits."
The adjusted projections for fiscal 2013 revenues adopted along with the 2014 outlook will result in a $66.4 million deposit into Oklahoma's $577.5 million Constitutional Reserve Fund on June 30.
The emergency fund, which stood at a mere $2.03 in January 2011, will have a record of $643.9 million as fiscal 2014 begins. The last high mark was $596.6 million in January 2010.
The fund currently has a constitutional limit of $824.7 million. The fund is capped at 15% of the previous year's revenue.
Total general fund revenues in fiscal 2014 are estimated at $5.9 billion.
The personal income tax is expected to bring in $2.12 billion next year, with another $2.1 billion generated by the state sales tax.