Saying he’s “bullish” on the Oklahoma economy, State Treasurer Ken Miller told Enid Rotarians Monday about the strong fundamentals of the state’s economic recovery.
Miller, the Edmond Republican elected to the office last November, gave a mostly positive report. He is a former state representative who holds a doctorate in political economics from the University of Oklahoma and still teaches economics at Oklahoma City University.
Miller said although Oklahoma had economic difficulties during the Great Recession, he said the state is blessed to be in the economic position it is today.
“Our revenues have been climbing now over 18 months, after they took a very significant dive,” he said. “What we have seen is we’ve had growth virtually across all sectors and all revenue streams.”
Last month saw collections up 7.1 percent over a year ago and 15.2 percent the month before that. The lowest year-over-year growth the state has had in the last 12 months is 3.5 percent.
However, the state’s 12-month total as calculated still is not up to the state’s highest number on collections, which was $11.28 billion. The highest collection so far since the recession has been $10.43 billion.
“We’re not up to where we were pre-recession levels, but we are definitely heading in the right direction,” he said.
Miller said the state’s unemployment rate is another good story, calling it much better than the national average.
“We’re holding at 5.6 percent, which is down a little bit from August. We’re almost 4 percentage points below what the national rate is,” he said.
The major sources of revenue for the state are income tax, gross production (extraction) tax, sales tax and motor vehicle tax. All are up, except for motor vehicle tax, which is flat. The average uptick from a year ago is up 7 percent.
Miller said as the state has recovered, the Rainy Day Fund also has seen a relatively large deposit of $226 million after the fund was drained during recent budget shortfalls.
“We’ve started building that back up,” he said.
The majority of the new growth has come from the mining (energy) sector and the manufacturing sector.
Miller said the Oklahoma economy has diversified quite a bit over the past few decades, yet the energy sector still is a large player in resources.
“Almost a third of our economy is connected to the energy industry,” he said, and the job growth associated with the energy industry has been strong for the rest of the United States as well.
“Our job growth has been consistently higher (than the rest of the nation) throughout the recovery,” he said.
Miller also mentioned corporate tax collections are strong. The top 25 Oklahoma capitalized companies saw their stock prices trending upward until September, when there was a big selloff in the stock market indexes. However, there has been a spike back up in October.
“Another reason for our good numbers is the real estate prices have remained stable,” Miller said. “Real estate is pretty much the largest source of wealth for most households. That shows why our constituents feel a bit more confident and spending a little bit more in Oklahoma: because their greatest source of wealth has not declined.”
However, the caveat is the number of building permits, which remains low. The construction industry has not seen the same level of recovery in the state as other sectors.
“I am an eternal optimist,” Miller said. “We have seen a bunch of positive numbers, and those are the facts as they are today. It is difficult to look at these numbers and say that Oklahoma is not heading in the right direction.”
He acknowledged external threats, such as financial issues in Europe and the threat of terrorism and unrest in the Middle East.
“Washington’s fiscal failures is a concern for us,” he said. “We cannot continue to spend money at the rate we have been. It is not sustainable, and that will cause us great problems.”