Oklahoma has more money for 2014; oil and gas producers get breaks
Lawmakers and the governor will have $214.6 million more to build into the state budget for fiscal year 2014 than they did in the current budget, according to early estimates of revenue the state is required to certify Thursday.
Of the projected $214.6 million windfall, Doerflinger cautions that a portion of it — roughly $60 million — will not be realized if an agreement is made at the federal level to avoid the tax increases that come with the fiscal cliff.
Federal taxes would rise if a plan can't be reached that would keep in place tax breaks granted by former President George W. Bush. The increase also would have an impact on state taxes, Doerflinger said Wednesday.
“Because of income taxes going up, that revenue number is higher by $60 million,” he said. “I'm not saying that, that's the number because I think there's going to be some agreement whether it's somewhere between zero and $60 million.”
The federal tax rate will impact taxes in Oklahoma since state taxes are based entirely on what people report from their federal taxes as their taxable income. If the nation falls off the fiscal cliff the standard deduction will be lower, and thus most Oklahomans will report a greater taxable income.
Doerflinger said with or without a reduction in the standard deduction, he supports talk of reducing Oklahoma's income tax. Plans last session by the governor and Republican lawmakers to reduce the state income tax failed in the Legislature, and ironically it looks as though collections for income tax will grow in fiscal year 2014.
“I'm a believer in income tax reduction, and it will be part of the conversation this session again,” Doerflinger said. “You will not see something out of the governor's office … that involves as much complexity as we saw last session.”
He said there will be a much simpler proposal this year.
Doerflinger said he isn't of the mindset that the state should spend all the excess money, but there's certainly no shortage of suggestions for how the money should be spent.
From repairs needed on the state Capitol, to funding needed to complete the American Indian Cultural Center and Museum, the money needs a home.
Additionally the state must fund a plan to reform the Oklahoma Department of Human Services.
State agencies have submitted their budget needs for fiscal year 2014 and have requested a combined $1.4 billion more than was budgeted for the agencies last year, he said.
“When you take individual agencies, I see more reasonableness,” he said. “But there's no question … there is a thirst for more money.”
Contributing: Adam Wilmoth, energy editor
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