OKLAHOMA CITY – Even as Oklahoma’s economy was roaring thanks to an oil boom, state services like education felt the pinch because costly tax cuts and incentives ate up much of the surplus revenue.
When the inevitable bust followed, beginning last year, oil prices slid to the $40-per-barrel range, driving up unemployment and prompting energy sector layoffs.
Dwindling revenue collections coupled with the tax cuts and corporate breaks have punched a huge hole in the state’s budget.
The latest cut to the top income tax rate is scheduled to take effect in January, just as the state is grappling with the growing budget hole.
Gov. Mary Fallin has defended the income tax cut as a way to spur the state’s economy, but critics argue the state’s financial crisis is self-inflicted.