Legislators will have nearly $40 million more to appropriate this year than the amount estimated a month ago, according to figures approved Thursday by the Oklahoma Tax Commission.
The better-than-expected revenues nearly make up for a loss in income tax revenue caused by the agreement between Congress and the president early this year to keep in place most tax breaks granted by former President George W. Bush.
The Tax Commission estimated in December that lawmakers would have $7 billion to appropriate for the 2014 fiscal year, which begins July 1. The estimate was $214.6 million more than the amount available a year ago. The December estimate is made so the governor can develop a budget to present to legislators in early February to kick off the four-month legislative session.
The December estimate was made with anticipation the Bush tax cuts would be eliminated, based on existing law at that time. State Finance Secretary Preston Doerflinger cautioned that the new revenue figures could be less if the tax cuts were continued. The president and Congress agreed in January to keep the cuts.
As a result, Doerflinger estimated lawmakers would have about $170 million in new money.
The Tax Commission on Thursday approved final revenue projections for the 2014 fiscal year, which indicate lawmakers will have about $206 million in new revenue.
The exact amount will be determined by state finance officials who will develop final figures for the state's budget panel, the state Board of Equalization. The board, made up of several elected officials, is scheduled to meet Tuesday to certify the amount of revenue lawmakers will have available this year to appropriate.
Altogether, agencies have made budget requests totaling an increase of about $1.4 billion for the 2014 fiscal year.
Gov. Mary Fallin also is seeking to knock a quarter percent off the state's highest personal income tax rate, dropping it from 5.25 percent to 5 percent. The cut would cost the state about $40 million in revenue for the 2014 fiscal year and about $120 million in future years when fully implemented.
“We're confident that Tuesday's certification will bring markedly more growth revenue for next year's budget than the $178 million in growth we used to build the governor's budget,” said Doerflinger, who also serves as the governor's chief budget negotiator. “The big picture continues to look strong as overall revenues have continued to grow.”
The current fiscal year should finish out strong, said Reece Womack, the Tax Commission's economist who prepared the estimate. Better-than-expected collections of state income taxes and the gross production tax on oil will result in an additional $13 million for the state's coffers since the December estimate.
As a result, $77.4 million instead of $66.4 million will come in above estimates and will be deposited, according to state law, in the Rainy Day Fund, the state's savings account.