Newspaper article THE JOURNAL RECORD

Surging Oil Prices May Lift State Economy, Revenue

Newspaper article THE JOURNAL RECORD

Surging Oil Prices May Lift State Economy, Revenue

Article excerpt

Higher oil prices could stimulate Oklahoma's economy and boost state revenues.

Steady oil and gas prices over the last several years has already made a difference in the state, said Mark Snead, author of a report released Wednesday by the Oklahoma State University Center for Applied Research.

Snead, an economist for the center, said that unlike most other states that can only brace for the higher prices, certain sectors of Oklahoma's economy will benefit.

While oil and gas no longer dictate the state's economy like they did before the oil bust, the upturn in oil prices still make a positive difference here, said Snead. The current boom in oil and gas is providing an important stimulus that could be extended if prices stay high as forecasters suggest.

Light sweet crude for November delivery fell 39 cents to settle at $49.51 per barrel on the New York Mercantile Exchange, after rising above $50 a barrel Tuesday.

Higher energy prices also could fuel an increase in revenues for the state. But state officials say it is still too soon to start counting on more gross-production tax dollars.

State Finance Director Scott Meacham said in a report from Associated Press that there is a lag time of about two months in actual collection of the tax.

Oklahoma took in about $116.4 million from the tax during the fiscal year ended June 30.

Year-to-date, we've been behind where we were last year for the same period, Meacham said. But if prices stay high, Meacham said officials expect to see an increase in revenue to Oklahoma's special education funds.

The funds include the common education technology fund, Oklahoma tuition scholarship fund and higher education capital fund, which were created in 1999.

Gross-production tax revenue from oil also goes for county roads and bridges and to a Rural Economic Action Plan fund administered by the Oklahoma Water Resources Board.

Finance Office public information officer Shawn Ashley said revenue going into the five funds is capped at $150 million. Any revenue above that would spill over into general revenue.

That has never happened, Ashley said. It's a pretty high cap. Last year, the total collected for the five funds was $98. …

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