DALLAS – Oklahoma revenues fell 18% below projections in February, the sharpest drop in the current fiscal year, according to state finance secretary Preston Doerflinger.
General revenue fund collections for the month were $225.6 million, $49.4 million below the prediction on which the current state budget was based.
Revenue fell $75.9 million, or 25.2%, below prior year collections. That prompted the second revenue failure declaration of the current fiscal year. A revenue failure is declared when revenues are insufficient to meet the current year's needs.
"March's deepened midyear revenue failure reduction was necessary because the rest of the year is projected to look a lot like February," Doerflinger said.
The worsening scenario comes as Oklahoma lawmakers look for ways to close a $1.3 billion budget gap in the 2017 fiscal year that begins July 1. The Sooner State's fiscal condition has taken a dramatic downturn with the price of oil.
The revenue failure declarations have resulted in 7% across-the-board funding cuts to state agencies.
Money was taken from the state's rainy day fund to offset some of the cut for prisons and schools.
"It bears repeating that the most responsible way out of this is by adding stable, recurring revenues into the next budget as the governor proposed and is actively discussing with legislature," said Preston Doerflinger, state finance secretary.
On March 9, Republican legislative leaders and Gov. Mary Fallin announced an agreement to use $72 million from the state's rainy day fund for the State Education and Corrections departments.
After making two cuts to education since Christmas, the state reversed course Wednesday and decided to take money out the rainy day fund.
The state has cut $109 million from education. The plan is to take $51 million out of the fund for education and $27.5 million out of the fund for the Oklahoma Department of Education.
On March 15, Oklahoma Insurance Commissioner John D. Doak requested that the Oklahoma Insurance Department no longer receive appropriated funds.
"Right now Oklahoma is dealing with a budget crisis," said Doak. "We certainly want to do everything we can to help with the massive shortfall. Since my office has the ability to operate on the licensing fees we collect, it only makes sense for our appropriation to go elsewhere."
Since Doak took office in 2011, the OID has received a total of $9 million in appropriated funds. In that same time period, the Legislature has taken $28.5 million.
The Board of Equalization last month certified $5.85 billion in revenues for FY 2017 appropriations, which is $1.1 billion, or 15.9%, less than was appropriated for FY 2016.
The board in December projected a budget hole of $900.8 million, or 12.9%.
By law, rainy day fund appropriations and certain revolving fund authorizations are not factored into the board's estimates. With those factors considered, there will be $1.3 billion, or 19.1%, less to appropriate for FY 2017, Doerflinger said.
Since June 2014, Oklahoma has lost at least 12,500 energy sector jobs as oil prices have fallen 75%.
"It's been more tough sledding since December, so the hole grew as expected," Doerflinger said.
