Senator Kenneth Corn
Democratic Caucus Chairman
Senate District 4
Le Flore and Sequoyah Counties
For Immediate Release:
February 20, 2007
Senator Kenneth Corn
Revised Revenue Estimates Show Need for Budget
Stabilization Legislation, Senator Corn Says
A significant reduction in the amount of revenue expected to flow
into state coffers in Fiscal Year 2007 signals a need for a Constitutional
amendment that will help stabilize the state budget, a veteran State
Senator said Tuesday.
When the State Board of Equalization certified the final FY 2008
revenue projections Tuesday, the estimate of funds available for
the coming fiscal year was about $270 million less than the amount
the board initially certified in December.
Corn said the cyclic nature of Oklahoma’s energy-driven
economy is exactly why he believes the state needs a Constitutional
amendment that would limit use of excess gross production tax revenue
to one-time expenditures.
“State government in Oklahoma cannot afford to repeat the
mistakes of the past – going on a spending spree when times
are good and, thus, creating a financial crisis when oil and gas
prices drop,” Corn said. “I have filed legislation that
would protect against the roller coaster budgeting that results
from the cyclic nature of energy prices.”
Senate Joint Resolution 5 calls for a constitutional amendment to
be considered by state voters. It would require the certification
of the 10-year average of gross production tax revenue from oil
and natural gas and limits Legislative appropriation of revenue
above that average to one-time expenditures. SJR 5 has not yet been
granted a hearing in the Senate Appropriations Committee, which
will hold its final meeting on Senate bills Wednesday.
“This would prevent the Legislature from repeating the mistakes
of the 1980s when the oil boom dramatically increased state revenues
and, in turn, led to a series of tax cuts and growth in state expenditures,
leaving a huge hole in the state budget when the boom went bust,”
The measure has been named the Fiscal Responsibility and Budget
Last year, Corn said, oil and gas revenues spiked to all-time highs.
The Legislature simultaneously passed the largest tax cut in state
history and the largest state budget ever. Now the forecasts on
which those budgetary decisions were made appear to be inflated.
“We can’t keep doing that and not expect to face a fiscal
crisis in the future. Oil and gas prices have already dropped below
their levels from last year and that is going to lead to some tough
budget decisions to make in the next session,” Corn said.
“By limiting appropriation of gross production revenues above
the 10-year average to one-time expenditures, we can provide greater
stability in the state budget. If we don’t get a handle on
this issue we’re going to be facing a full-blown fiscal crisis.”
Corn said that under his proposal the excess gross production revenue
could be spent on capital needs and things like highway maintenance
and bridge replacement.
“This measure won’t allow the Legislature to use an
unstable source of revenue to create new programs or expand old
ones. That’s not fiscally responsible and my bill will allow
the people to force some fiscal restraint on their elected leaders
with a constitutional amendment,” Corn said.
The 8-year legislative veteran filed a similar measure last year.
For more information contact:
Senator Corn's Office - (405) 521-5576