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State economic forecast for 2008 hinges on oil

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Economists and budget directors recently laid out preliminary figures and forecasts for 2008 to the House Appropriations and Budget Committee. The only thing everyone agreed on was that Oklahoma's well-being rises and falls with the price of oil.

"Oklahoma's economy is not diversified enough to soften a blow from (an) oil (bust)," said Oklahoma State University economist Mark Snead. "(Oil's) tentacles stretch everywhere. The numbers are staggering."

Since 2004, corporate income taxes are up 28 percent while sales-tax revenue increased 25 percent. Individual income-tax revenues have also gone up by almost 12 percent.

DOMINATION
Of the state's 77 counties, only six do not produce any energy revenue. Carter County is the biggest oil producer in the state while Beckham County provides the most natural gas.

So, with oil hovering around $90 a barrel, it would seem Oklahoma should continue to reap nice financial rewards.

"One concern we have, there is clear evidence growth in (the oil) sector has moderated," Snead said. "It's not declining, but contribution from energy will be significantly less. We're seeing a dramatic slowing in energy hiring and income growth. The spike appears to be over."

DAMAGE
If the price should fall, state revenues would take a hit. University of Oklahoma economics professor Robert C. Dauffenbach estimated the damage to be around $150 million.

"That's just oil," Dauffenbach said. "Gas prices would suffer as well. It would hurt." "Scott Cooper

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