State budget watchers take note.
Plunging oil and natural gas prices have helped cause year-to-date state general revenue fund collections in April to drop below the official estimate for the first time this fiscal year.
“We’ve been waving the caution flag all year and it appears April may mark the beginning of the temporary revenue downturn we’ve been expecting,” said Preston Doerflinger, secretary of finance, administration and information technology. “It’s going to require agencies to continue tightening up their ships, and there’s certainly still room to do that in some areas.”
April general revenue fund collections came in 11.4 percent below projections for the month, sending fiscal year-to-date collections slightly below the official estimate for the first 10 months of the current fiscal year.
April general revenue fund collections came in at $673.3 million, which was $87 million below the estimate and $17.2 million below last fiscal year’s collections.
Monthly state general revenue fund collections from the gross production tax on natural gas were only $216,794, which was $19.4 million or 98.4 percent below official projections.
General revenue fund collections from the gross production tax on oil came in at $8.7 million in April, which was $9 million, or 50.8 percent, below projections.
Oklahoma oil and gas companies have reduced drilling in response to low commodity prices.
General revenue collections for the first 10 month of the current fiscal year now stand at $4.8 billion, which is 0.1 percent below the official estimate and $199.5 million, or about 4.3 percent, above collections last fiscal year.
There is a 5 percent cushion built into the budgeting process, so state agencies are not likely to face a funding shortfall that would require cuts during the final two months of the current fiscal year.
The greater concern is how the budget will be impacted during the next fiscal year, which begins July 1.
Doerflinger, the governor’s lead budget negotiator with the Legislature, said the fiscal year 2016 appropriated state budget will be announced soon and will reflect the anticipated revenue downturn.
“Any day now we expect to reach agreement with the Legislature on a budget that makes the responsible spending reductions necessary to preserve funding for core services,” Doerflinger said. “It’s going to be a smaller budget than this year’s, but the real world effect on the services government provides should be minimal to nonexistent.”