State revenues back on track, but caution is urged
State Treasurer Scott Meacham reports today that for the first time since December 2008, state revenues came in above predicted levels.
But with those numbers come a lot of caveats. For starters, while revenues exceeded expectations, they were still below the levels in February of 2009. The difference is that the Board of Equalization had much lower expectations for this year.
Secondly, even with the overage and 10% across-the-board reductions, the state had to take another $85-million out of various cash reserve funds in order to make allocations to state agencies. This is on top of the $233-million taken in the six previous months, all of which has to be paid back by the end of June.
And delving deeper into the numbers, we see that oil and gas revenues made the biggest increase. While it’s good to see those revenues coming back up, it is a volatile source of funding that can’t be relied upon. While income taxes did produce nearly $20-million more than expected, it was offset by sales taxes which remain well below predictions.
It’s too early to say Oklahoma has hit bottom and is starting to rebound. That’s why it’s important to continue the effort to save state dollars. Even if revenues are above expectations for the rest of the year, Oklahoma is still in a deep hole.