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November 5, 2009

Meacham: More budget cuts may lie ahead

By Andrew Knittle

State Treasurer Scott Meacham expects revenue shortfalls to continue when he receives October's figures later in the week.

Meacham made the comments Wednesday while in Norman speaking to a group of financial advisers about a new college savings plan available to Oklahomans.

Last week, Oklahoma leaders said they expect the state's economy to keep sputtering along in the coming months and that state agencies will continue to see 5 percent cuts until at least June 30, 2010, the end of the current fiscal year.

During the first three months of the fiscal year, the state collected about $1.1 billion in tax revenue, down almost $462 million compared to the same three months last year.

Meacham said deeper budget cuts may lie ahead, depending on the state's revenue. He also said the nearly $600 million Rainy Day Fund may have to be tapped in the near future to help fund vital state agencies.

Meacham said he would make an official announcement concerning October's state revenues Tuesday, adding he has no idea when the recovery will begin in Oklahoma.

"Hopefully we're going to see a bottom at some point," he said. "You can kind of see one forming, but we just don't know yet."

He spoke to the local chapter of the National Association of Insurance and Financial Advisors about a college savings plan he helped establish in March called the Oklahoma Dream 529.

In the few months since it was set up, the new plan -- which must be arranged through a financial adviser and can't be set up directly with the state like the existing 529 college savings plan -- has grown to about 800 accounts worth $4.7 million, he said.

"In this economy -- with no marketing money behind it -- I think the plan is doing pretty well," Meacham said. "And I personally believe that every person with children or family members planning to go to college needs to set one of these up."

Meacham said the plan is attractive because it allows deductions of up to $20,000 for couples ($10,000 for individuals) and contributions to it are free from both state and federal income taxes. He also said the beneficiary doesn't have to be an immediate family member and can be changed without penalty if needed.

Meacham, who has been state treasurer since 2005, announced last week that he will not seek re-election when his term expires in January 2011.

Andrew Knittle 366-3540 aknittle@normantranscript.com

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