State finance officials broke the news Thursday afternoon that the Oklahoma government budget hole will grow to $1.3 billion, not $900 million and certainly not $1.1 billion as some had speculated as the state legislature returned to work. And the downturn in Oklahoma’s oil and gas industry is getting much of the blame.
Preston Doerflinger, the Secretary of Finance made the announcement, indicating there will be 19.1 percent less to appropriate for FY 2017.
“The true budget hole the Legislature will face is larger than what the board (Equalization) will consider Tuesday,” he said. Preliminary, unverified estimates show the Board of Equalization will consider certifying $5,851,664,555 in revenues for FY 2017 appropriation which is $1.1 billion or 15.9 percent less than was appropriated for FY 2016. He said the board in December projected a budget hole of $900.8 million or 12.9 percent.
“Between the board’s initial FY 2017 estimate Dec. 21 and Wednesday, oil prices fell 21 percent form $34.74 per barrel to $27.45 per barrel,” explained the announcement. Oklahoma lost at least 500 more energy sector jobs and major energy firms announced plans for further employment reductions in the coming months. Since June 2014, the state has lost at least 12,500 energy sector jobs as oil prices fell 75 percent.
“It’s been more tough sledding since December, so the hole grew as expected,” continued Doerflinger. “The untenable cuts to core services a hole like this could cause are avoidable when bold actions like the governor proposed are taken. There are responsible ways out of this when we show courage and resolve to do the hard work.”
The Board of Equalization will meet Tuesday, Feb. 16 at 10 a.m. in the Governor’s Large Conference Room at the State Capitol.
