Oklahoma faces severe long-term fiscal challenges despite its current rosy budget situation, according to a new issue brief from Community Action Project (CAP). The evidence from national and state reports is clear and compelling that Oklahoma is approaching a period where our expenditure needs will greatly exceed our revenue capacities,” said David Blatt, the report’s author. “Our state policymakers need to become more aware of the looming structural budget deficit and begin to take steps to avert a fiscal train wreck.” The issue brief surveys three recent studies by academics and policy institutes that point to the dangers ahead for Oklahoma and other states. A rapidly aging population, growing health care and pension costs, an archaic tax system, and federal policies that shift more costs to the states are among the factors identified by these studies as contributing to the impending fiscal crunch. Recently, the National Conference of State Legislatures joined the chorus of voices sounding an alarm, warning that “state spending will outpace revenue growth over the longer term”. “When revenues are soaring, it’s hard for our policymakers to look beyond the immediate fiscal year and election cycle to the problems further ahead”, Blatt noted. “Unfortunately, the actions of recent Oklahoma legislatures have worsened our long-term fiscal outlook by enacting large permanent tax cuts and missing an opportunity to put our underfunded teachers’ retirement system back on course”. The brief concludes by suggesting that improving our budget forecasting abilities and undertaking a comprehensive review of our long-term fiscal situation can help Oklahoma prepare for the coming challenges. Posted at 9/14/2006 11:56:00 AM