By Patrick B. McGuigan
In his monthly interaction with Capitol reporters, Oklahoma Treasurer Ken Miller was upbeat about continued forward momentum for the economy and resulting finance trends for state government. Further, he said it is “always” the right time to look at right-sizing government functions.
One reporter asked if continued positive economic trends could have a “snowball effect,” where good news feeds itself and businesses look increasingly to Oklahoma as a business destination and friendly environment.
Treasurer Miller responded simply, “Absolutely.” He then noted that the state’s good economic news will not only capture regional and national attention, but has potential to bolster the state’s position internationally.
He disclosed that a delegation of mainland Chinese business leaders had visited with state and private sector officials. He had the opportunity to discuss economic trends with them in one session.
In response to later questions, he said the group was focused on oil and gas issues. He told CapitolBeatOK he did not know whether or not the Chinese delegation had any interest in exploring automobile manufacturing in the Sooner State. (That possibility excited great state and regional interest a half-decade ago, but faded when China decided to focus on its own domestic car manufacturing).
Near the end of his question and answer time with journalists, CapitolBeatOK asked if Miller thought continued jobs growth and positive economic trends provided a good opportunity to focus on “right-sizing” government in a methodical manner, rather than responding to fiscal pressures.
Miller responded, “Personally, I think it is always the right time to have that discussion. That should always be part of the discussion about budgets and other issues. Yes to ‘all of the above’ — this is a good time to focus on gaining efficiencies in spending and functions.”
In the discussion, Miller stressed the significance of a return to a $10 billion threshold in gross collections for the first time in more than two years. “Fifteen months into expansion it’s clear we’re in the recovery phase.” Miller said he is now confident there will not be a “double dip” recession.
With continued good news in job creation and no “uptick” in unemployment as might be anticipated at this phase of recovery, Miller clearly believes the future is bright. “We are up in every category of government revenue.”
In Miller’s analysis, all factors are positive. He contends the state recovery is primarily but not exclusively due to the oil and gas industry’s continued strength. He stressed the strength in all sectors, however. Miller also argued that gross collections are a better indicator of economic strength than more limited measurements. Receipts for general revenue, for example, account for only 40% of the state government revenue picture at any given moment.
Miller noted that easing of gasoline prices at the pump has clearly, for now, avoided concerns of consumer resistance to high prices. This concern has been a focus of discussion just four weeks ago.
Discussing Oklahoma versus Texas in terms of tax revenue and revenue sources, he noted that Oklahoma “relies on more volatile sources of revenue, whereas Texas draws much of its income from ad valorem [property tax]” levies.
Miller flatly predicted, “I expect a good year for Oklahoma for the coming year. The way we compare to other states has been favorable throughout this recent time of recession and recovery.”
He continued, “From a taxpayer’s perspective, a return to revenue growth is a good signal. It means the personal income tax rate can continue to ease, and that essential services will be adequately funded.”
In a prepared release circulated to reporters during the briefing in his office, Miller reported “Oklahoma’s economy has made up more than one-third of the dollars lost during the Great Recession.”
Miller summed things up this way:”The crisis is over.”