OKLAHOMA CITY (AP) -Gov. Brad Henry asked state Treasurer Scott Meacham Thursday to review Oklahoma's finances to protect the state during an escalating financial meltdown that has caused the stock market to tumble and forced Congress to approve a $700 billion plan to prop up failing financial institutions.
But Henry said Oklahoma's economy, banks and revenue are strong compared to other states and that there is no cause for alarm.
“Our economy in this great state remains strong,” Henry said. “It's very important that the people of our state remain calm.
“This is a difficult time. We will get through this economic crisis.”
Henry ordered the statewide financial review the same day that the Dow Jones industrials dropped more than 675 points to their lowest level in five years.
Meacham said the turmoil on Wall Street has affected state pension systems and pending bond issues.
Oklahoma retirement systems have recorded losses as the stock market has declined. But he said state pension systems remain strong and that state workers who receive a pension “have absolutely nothing to worry about.”
Meacham also said it has become difficult to sell state bonds to finance capital improvement projects.
“An economy will not run without financing,” Meacham said. But financial difficulties related to the sub-prime mortgage market crisis has created a collapse in financing on a national level.
Meacham said the state began having trouble finding buyers for state bond issues in March and has had to hold on to some because the state cannot find a buyer in the institutional bond market.
“We're waiting for liquidity to come back to the market,” the state treasurer said.
Last spring, the Legislature authorized a highway bond issue in two increments of $150 million each in 2009 and 2010. Lawmakers also authorized $75 million in bonds to match private donations to pay for professor positions at state colleges and universities.
Also approved was $25 million for dams and other improvements along the Arkansas River in the Tulsa area, $25 million for the native American Cultural Center in Oklahoma City and $25 million for flood control and conservation projects statewide.
Henry says he wants Meacham to consult with financial experts to map a strategy for timely implementation of bond issues.
“We expect the markets to recover,” Meacham said.
In spite of the national downturn, the state's economy remains strong.
Meacham said state revenue for the fiscal year that began July 1 is currently $74 million ahead of estimates and $93 million above actual collections one year ago.
Henry said the state has managed to make the maximum deposit into the Rainy Day constitutional reserve fund and that the fund totals almost $600 million - more than at any other time in state history. In addition, Oklahoma's credit rating was increased this year for the first time since 1961, he said.
“That bodes well,” the governor said.
Meacham said officials expect a downturn in state sales tax collections in future months as Oklahomans spend less.
due to concerns about the economic downturn.
Gross production taxes may also decline as oil and natural gas prices fall and production declines.