Recent gains in revenue for the state’s main bank account are good news for the state, but the trends that led to the increase are not guaranteed to continue, a state budget official said Tuesday.
“There’s no guarantee we’re out of the woods yet,” Kevin Hibbard, director of the state’s Budget Department, told Cowboy State Daily. “But we are happy we have a little bit of a revenue bump.”
The latest update on the state’s revenues prepared by members of the Consensus Revenue Estimating Group — a group of financial experts who predict what the state can expect to receive in the future — showed that as of the end of June, income for the state’s “General Fund” exceeded predictions made in January.
The report showed that thanks largely to higher sales tax and mineral tax income, the general fund, which finances most state operations, received $168 million more than predicted. The number grows to more than $200 million once capital gains from investments are counted.
The extra money is particularly good news given the fact the Legislature, in an effort to reduce state spending in the face of more dire revenue predictions made in January, used a one-time source of funding to pay for major maintenance of state property, Hibbard said.
“We have to remember we have to recover from that,” he said. “I think there’s an expectation that we will have to put the major maintenance (costs) back into a (regularly occurring budget) line item rather than pay for it with a one-time source of funds.”
Much of the increase in income was attributed to unexpected gains in sales taxes which resulted from increased retail sales generated by COVID stimulus payments and Hibbard said the state cannot anticipate such increases again.
“We attribute that (increase) to the stimulus payments, which is not going to be around forever,” he said.
The gain in oil and gas tax income, meanwhile, was was due largely to oil and gas prices that were higher than what had been expected in January, he said.
“We do like the fact the price of oil and gas is better than we estimated,” he said. “We like the fact that we have a modestly higher than anticipated price for oil and gas and we hope that continues.”