What do the three people above have in common? This is a great story of Christmas cheer.
The first guy (the Saudi Oil negotiator) called the guy in the middle (Santa Claus) to bring the last guy (an oil executive) a very merry Christmas present! The OPEC oil deal was agreed upon in principal yesterday. This will result in 1.32 million barrels of oil not leaving the market for at least six months. The effect was immediate and profound on a languishing oil market.
At 12:00 AM this morning, Brent Crude had broached the $51.00 mark per barrel, and the West Texas Intermediate was above $50.00 a barrel. Remember that our production taxes are set on the expectation of $42.00 a barrel oil. This is a great solidification. However, it's also time to "remember the bad stuff" in this article. Just like the tinsel and lights of Christmas, the excitement will come down on this deal, and there will undoubtedly be cheating and other things occurring. What this means is that the accord will probably not work as intended, but for now, enjoy the thought that we may actually have a collection in the state that exceeds prediction. Please no Snoopy dances, though. This can break down.
At this point, you're probably wondering how this helps your school. Well, the most obvious is that this may protect the state budget somewhat. We are already at 1.8% below expected revenue collections 1/4th of the way through this year; in other words, the last quarter of the year could show a revenue failure unless several different factors come together. One of the major factors just did--if it holds together. This won’t be an immediate fix, but it will be helpful as we get into the spring. We can still expect some rough patches moving forward as market forces correct themselves, but life is definitely looking up.
We have received some questions about "Obamacare" reporting. It's important to remember that you do not have to report if you employ less than 50 individuals, but you do need to fill out forms in case of an audit. Just because we voted to "Make America Great Again" doesn’t mean you don’t have to comply with this year’s tax requirements. Note: if we were to receive enough interest, we would be willing to host another Affordable Care Act insurance workshop, so please let us know.
Terri Thomas has a very good article in this month's newsletter about overtime rules. The rules that were to go into effect on December 1, 2016, have been struck down by a federal judge. I would really encourage you to read her article and let us know if you have any questions.