OKLAHOMA CITY — A recent report says low oil prices and the oil industry slowdown continue to create financial challenges in Oklahoma and other oil-dependent states.
Moody’s Investors Service released its report on Wednesday, The Oklahoman (http://bit.ly/2cqzKtA ) reports.
The report analyzed direct revenue effects, including production taxes and revenues, and indirect revenue effects, such as industry spending cutbacks and layoffs, and the ability of the state to adapt to the ongoing challenges.
Moody’s has given Oklahoma’s credit the company’s third-highest rating. The company says it expects gross production tax revenues will remain well below collections in previous years because of expectations for oil prices to remain in the $40 to $60 per barrel range.
Moody’s also said the indirect effects from the oil industry on other parts of the economy have even larger negative effects than gross production tax revenue because of lower sales and income tax collections.
Preston L. Doerflinger, Oklahoma’s secretary of finance, administration and information technology, says the agency takes the report seriously.
“In general, what they’re signaling — and other outlets are signaling the same thing — speaks all the more to why the governor has been hyper focused on addressing structural problems in our budget and being more out front on the fact that we’re going to have to continue to talk about new reoccurring revenue to meet the needs of our state,” ” Doerflinger said.
Information from: The Oklahoman, http://www.newsok.com