State Sen. Kenneth Corn said dramatically declining budget projections are proof that the legislature needs to consider his budget stabilization legislation in the 2008 session.
“This time last year we were looking at $277 million in projected revenue growth. Now we’re looking at a projected growth of $32 million, and that number could well decrease by the time the final budget certification is announced next month,” said Corn, D-Poteau. “It’s a recipe for disaster to base reoccurring expenditures on something that fluctuates as much as energy prices. That’s what we did during the oil boom, and we know how that ended. We can’t afford to repeat the mistakes of the 1980’s.”
Senate Joint Resolution 5 calls for a Constitutional Amendment to be considered by state voters which would require certification of the 10-year average of gross production tax revenue and would limit appropriations of revenues over that amount to one-time expenditures. The legislation was filed in 2007, but was not heard by the Legislature.
“Energy prices are up now, but we’ve seen them rise and fall in a matter of days. In the fall of 2006, we were looking at record prices, but by this time a year ago, we were paying about a dollar less per gallon,” Corn said. “It simply makes fiscal sense to avoid basing ongoing expenditures on a source that varies so wildly.”
Corn said by limiting appropriation of gross production revenues above the 10-year average to one-time expenditures, it would provide greater stability in the state budget and greater security for Oklahoma citizens. He explained the excess gross production revenue could be spent on vital capital needs, including repairing dangerous roads and bridges.
“Remember how much energy prices fell in the wake of the September 11th terrorist attacks and subsequent recession? By 2003, we were looking at a $427 million shortfall. It was a very difficult time, and crucial services ranging from education to senior centers saw reductions in funding,” Corn said. “Now economists are warning about another recession. SJR 5 would offer us much greater fiscal stability and security. I hope my fellow members will give it their consideration before it’s too late.”