OK state general revenue up for FY 2014, but slightly below estimate
Share this Article: Twitter Facebook Republish Print
YouTube Video

Published: 15-Jul-2014

OKLAHOMA CITY – Oklahoma’s General Revenue Fund (GRF) collections for Fiscal Year 2014, which ended June 30, came in .03 percent above prior year collections and 4.8 percent below the official estimate.

As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual state budget. Made up of nearly 70 revenue sources, the GRF is where all taxes flow except those dedicated to specific programs.

FY 2014 gross collections to the state treasury totaled $11.7 billion and grew $469.3 million, or 4.2 percent, above FY 2013. The GRF’s share of those collections totaled $5.6 billion, which was just $1.5 million, or .03 percent, above prior year collections. That is $283.8 million, or 4.8 percent, below the official estimate upon which the Fiscal Year 2014 
appropriated state budget was based.

“It was an odd year for state finance that shows the need to continually evaluate fiscal policies,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “The economy is clearly strong and the government is collecting more revenue because of it, but that revenue isn’t making it to the budget like it once did.”

In FY 2007, the GRF received 55 percent of state tax collections for discretionary spending by elected officials. By the close of FY 2014, just 48 percent of annual collections had gone to the GRF for discretionary spending.

“Last year’s GRF collections were basically flat even though total collections grew 4.2 percent,” Doerflinger said. “The big reasons were increased costs for off-the-top earmarks and decreased corporate income tax collections. Off-the-top apportionment's were up by $102 million while corporate income tax collections were down by $145 million.”

Doerflinger continued, “That combined budgetary hit of $247 million proved significant. Governor Fallin was right to caution against further off-the-top spending last session, and I’m pleased the Legislature acted conscientiously by adding no more off-the-top policies so further study can be done.”

Revenues missed the monthly estimate in all but two months during FY 2014, which caused the state to nearly approach a revenue failure declaration that would have led to mandatory appropriation reductions for most state agencies.

“The problem was less with actual collections and more with forecasting and legislative apportionment of those collections. Gross revenue collections were strong, but the revenue didn’t wind up in the GRF at the level forecasted,” Doerflinger said. “This is a predicament of government’s own creation that can be addressed.”

Total FY-14 GRF collections were above prior year collections in three of the four major tax categories. GRF collections from sales tax, a leading consumer confidence indicator, were above prior year collections by $58.5 million, or 3.1 percent.

“The state economy was strong enough to produce growth in other tax areas that balanced out those areas facing noneconomic revenue declines,” Doerflinger said. “Sales tax revenues grew due to increased consumer spending while favorable oil and gas prices helped boost gross production tax collections. Those are good reflections on our economy, which we know is continuing to expand and beat the nation in many key categories.”

FY-14 income tax collections to the GRF were down $173.9 million, or 6.8 percent, from prior year collections, almost entirely due to corporate income tax declines. Corporate income tax collections to the GRF were below prior year collections by $145.1 million, or 32.1 percent, and below the estimate by $175.3 million, or 36.4 percent.

“The Tax Commission has received more amended corporate returns that will continue driving corporate tax collections down in the near term, but we’re cautiously optimistic that the trend will even out in the long term,” Doerflinger said. “Other states are in the same boat. This trend is not isolated to Oklahoma.”

Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports.

June GRF collections of $567.3 million were $10.6 million, or 1.9 percent, above prior year collections and $32 million, or 5.3 percent, below the estimate.

Major tax categories in June contributed the following amounts to the GRF:
 
Total income tax collections of $277.8 million were $19.8 million, or 7.7 percent, more than prior year collections and $12.9 million, or 4.4 percent, below the estimate. 

Individual income tax collections of $217.7 million were $29.6 million, or 15.7 percent, more than prior year collections and $11.4 million, or 5.5 percent, above the estimate. 

Corporate income tax collections of $60.1 million were $9.7 million, or 14 percent, below prior year collections and $24.3 million, or 28.8 percent, below the estimate.

Sales tax collections of $170.6 million were $6.8 million, or 4.2 percent, more than prior year collections and $7.2 million, or 4 percent, below the estimate.

Gross production tax collections of $41.4 million were $8.2 million, or 24.8 percent, more than prior year collections and $15.4 million, or 59.3 percent, above the estimate. 

Natural gas collections of $5.5 million were $1.7 million, or 46.3 percent, more than prior year collections and $2.3 million, or 69.7 percent, above the estimate. Oil collections of $35.9 million were $6.5 million, or 22.1 percent, more than prior year collections and $13.2 million, or 57.8 percent, above the estimate.

Motor vehicle tax collections of $20.1 million were $7.4 million, or 58 percent, more than prior year collections and $3.4 million, or 20.7 percent, more than the estimate.

Other revenue collections of $57.4 million were $31.6 million, or 35.5 percent, less than prior year collections and $30.7 million, or 34.8 percent, below the estimate.

sign up for email updates

Steal Our Stuff