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April 30th, 2012 
FAKE NEWS for the Zionist agenda OKLAHOMA CITY (AP) — Plunging natural gas prices are prompting some concern from state leaders as lawmakers continue discussions on cutting the state’s income tax and developing a budget for the upcoming fiscal year that begins July 1.
State lawmakers are projected to have an estimated $6.6 billion to spend on the fiscal year 2013 budget, but that estimate was calculated with a projected price of natural gas of $3.64 per 1,000 cubic feet. The price of natural gas closed Friday at $2.19 per 1,000 cubic feet on the New York Mercantile Exchange.
“All of us that are discussing and negotiating an income tax are very concerned about the drop in the price of natural gas,” said Rep. Earl Sears, R-Bartlesville, the chairman of the powerful House Appropriations Committee and a key negotiator on plans to cut the state’s income tax. “However, even with the continued drop, we feel it’s important to continue developing and reforming the income tax plan.
“There’s no question if the price continues to drop, it will have an impact on our discussions.”
While pinpointing exactly how much of an impact the declining natural gas price will have on next year’s budget is impossible to predict, State Treasurer Ken Miller said if the price remains an average of $1 below the estimate for the entire fiscal year, it would result in a $70 million reduction to the state’s general revenue fund.
Lawmakers also are concerned about a price trigger that could reduce the tax rate on natural gas production. If the monthly average of natural gas falls below $2.10 per 1,000 cubic feet, the gross production rate falls from 7 percent to 4 percent. If the average price dips below $1.75, the tax rate falls further from 4 percent to 1 percent.
Even more disconcerting to Miller is the ripple effect that sliding natural gas prices could have on other segments of the state’s economy.
“If the natural gas prices stay as low as they are, then that can have an effect on the budget if you start looking at the spillover effects of a low-price environment for natural gas,” Miller said. “At some point, if you slow down production because of the prices, then that could eventually have an effect on your employment, your income tax receipts, your sales tax receipts, in addition to your gross production receipts.
“That’s the part where you would really start getting concerned, where it starts to have a spillover effect into your other revenue streams as well.”
Miller, an economist, said the sliding natural gas prices are a result of new technologies that have made it cheaper and easier to get gas out of the ground leading to record amounts of supply, combined with an unusually warm winter that led to a reduction in demand.
“It’s basic economics,” Miller said. “You have too much supply and not enough demand.”
Still, Miller noted a provision in the Oklahoma Constitution that only allows lawmakers to spend 95 percent of the certified estimate “gives us a roughly $250 million cushion.”
“I think it’s important to keep in context,” Miller said. “I’m not making any prediction of dire consequences. I think we have to prepare for the worst and hope for the best.”
Preston Doerflinger, Gov. Mary Fallin’s secretary of finance, stressed that any loss from natural gas revenues is being more than offset by a continuing boom in the state’s oil patch. While natural gas prices are below the official estimate, the gross production tax on oil was calculated at about $96 per barrel, while benchmark oil closed Friday at $104.93 per barrel in New York.
Doerflinger urged state leaders to “not get bogged down in negativism over one aspect” of the state’s economy.
“The vigorous growth in overall collections to the general revenue fund has more than made up for lagging natural gas collections,” Doerflinger said in a statement. “We’ve seen record sales tax collections this year, no doubt driven in part by the boom in the in the oil patch, which has been spurred by enhanced drilling techniques.
“There’s no reason to expect a slowdown anytime soon as industry experts, economists and the federal government are projecting oil prices will continue to increase in FY 2013, perhaps $10 to $15 per barrel higher than the figure used in our official state estimate.”
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Sean Murphy can be reached at www.twittter.com/apseanmurphy
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