Economists assess state, local outlooks
The crowd at this year's Economic Development Luncheon heard mostly upbeat reports on the local and state economies Thursday.
State Treasurer Ken Miller said he's still bullish on Oklahoma, despite the dowturn in the oil and gas sector and said the state's budget problems are not so much the result of a poor economy but of the budget process.
Economist Mark Snead said he expects Lawton to enjoy a third consecutive year of economic recovery, although cuts in federal employment remain a question mark.
The luncheon was sponsored by the Lawton-Fort Sill Economic Development Corporation as a way to provide economic information to local business people and community leaders.
Miller said income and sales taxes had risen over the last year, while oil and gas taxes and taxes on motor vehicles had declined. The unemployment rate so far has ticked up only slightly.
The state budget for next year will be $74.3 million, or 1.03 percent, less than this year after state leaders filled most of a $611.3 million budget hole. About half the shortfall was created because one-time funds were used to balance the budget last year, he said; less than half was caused by lower oil and gas taxes, and the income tax cut that will take effect Jan. 1 accounted for about $50 million.
Miller said relying on one-time funds has become a problem. While taking money from other accounts may be necessary in the short term, it can cause long-term problems "because one day it will come home to roost."
Recent budget problems, he said, arose even before the downturn in the energy industry, when Oklahoma's jobless rate was well below the national average. There shouldn't be a state budget problem when the state's economy is expanding, he said.
He urged a reform of the entire tax system, one that will be broader and perhaps with lower rates and more diversified.
There should be no more income tax cuts unless they are revenue neutral or correponding cuts are made to spending, he said.
Reforming the tax system, he said, will "take political will and it's going to take political courage."
Despite problems with the budget, Miller said he's still bullish on the state's future. People in the oil and gas industry that he's talked to believe the price of oil will reach a level that will stabilize the industry, he said after the luncheon, and in the long term the state's expertise in oil and gas will make it poised to reap the rewards.
Lifting the ban on exporting oil, he said, would be "huge for Oklahoma" and the state is "poised for takeoff."