State’s economy is on record pace

By Michael McNutt

Published: July 12, 2006

Oklahoma’s strong economy generated record revenues for the state in the fiscal year that ended June 30, state figures showed Tuesday.

It was the second straight year of record collections for the state. During the past three years, the state’s general fund has grown by more than $1 billion.

Preliminary reports show collections for the state’s general fund for the 2006 fiscal year totaled $5.7 billion. That is about $745 million, or about 15 percent, more than the previous fiscal year.

General fund collections for the 2005 fiscal year were $4.96 billion, which was 7.8 percent more the 2004 fiscal year, according to records.

“Our economy continues to set record after record,” state Treasurer Scott Meacham said. “Our economy really is doing better than it’s ever done.”

Every major tax category finished ahead of prior year collections, he said.

The state for the second consecutive year will fill its savings account, the Rainy Day Fund, to its constitutional limit.

The Rainy Day Fund will receive a deposit of $34.4 million to bring the fund to its maximum allowable level — 10 percent of the prior year’s certified general revenue fund collections, or $495.7 million.

After the Rainy Day Fund is filled, the state will have a surplus of $520.4 million, Meacham said.

“I expected our year-end would be very good, but actually it was better than I thought it would be,” he said.

Revenue collections dipped four years ago. When Gov. Brad Henry took office in 2003, the state was facing a $700 million shortfall and a nearly empty Rainy Day Fund. “We were facing record shortfalls, now we’re facing record surpluses,” Meacham said.

The decision by the governor and legislators not to increase taxes during that time helped the state’s economy gain momentum when oil and natural gas prices began increasing, he said.

The state’s economy should continue to perform well, but its growth the next three years won’t be as marked as the past three years “because, quite simply, we can’t expect to see another doubling of oil prices and gas prices,” Meacham said.