Allocations to General Revenue summarized, tax collections near pre-recession levels, Finance official says

General Revenue Fund tax collections are inching closer to pre-recession levels nine months into the current fiscal year, Office of State Finance Director Preston Doerflinger said Monday (April 11).

For March, total GRF collections surpassed last year’s receipts for the same month by $37.3 million and the estimate by $42 million, Doerflinger announced in releasing his monthly revenue report.

“All major tax collection categories continue to do well, but sales tax revenues are especially encouraging because year-to-date collections from this source are currently outpacing pre-recession collections for the first nine months of FY-2008 by 1.2%,” he said.

“Overall, total year-to-date collections this year have now come within 15 percent of meeting total collection numbers through March of 2008 before the recession impacted Oklahoma,” Doerflinger said. At one point during the current fiscal year, total collections were down 20 percent from the totals prior to the recession.

“If gross production tax collections based on often unpredictable oil and natural gas prices are removed from the equation, we are within 12 percent of pre-recession receipts,” Doerflinger commented.

All major tax collection categories for March increased over the same month a year ago.  Sales taxes, a strong indicator of economic activity, were up 11.2 percent from March of 2010 and ran 3.9 percent higher than the estimate.  For the year, sales taxes are up 10.4 percent from the prior year.

The revenue report shows that General Revenue Fund collections totaled $438.5 million in March, according to preliminary calculations. That amount was:

 $37.3 million or 9.3 percent above the same month one year ago; and

       * $42 million or 10.6 percent above the estimate for the month.

Doerflinger, Oklahoma’s secretary of finance said high oil prices continue to produce money for the state’s General Revenue Fund at a pace of 188 percent more than in FY-2008.  Natural gas prices remain low, dragging down tax collections from that revenue source. 

Although the OSF report shows that personal income tax collections for March of this year dropped from March of 2010, Doerflinger said he was not overly concerned because Tax Commission reports indicate unusually large withholding collections last year, coupled with higher refunds this year for the same time period.

Doerflinger added:  “Income tax collections tend to ebb and flow from month to month, but so far this year they appear to be in line with a recovering economy.  However, it will be a slow process to completely rebound from such a deep recession.”

For the year, personal income taxes are $93 million or 8.3 percent above the estimate and $23 million or 2 percent above the prior year.  Corporate income taxes are also above both last year and the estimate.

In reflections sent to CapitolBeatOK, Governor Mary Fallin said, “It’s an encouraging sign to see tax revenues continue to outpace estimates, but we have a long way to go before Oklahoma is back to where it was before the recession.”

“In the meantime, our lawmakers need to commit themselves to a budget process that produces significant savings and a smarter, more efficient state government,” Fallin added.  “We also need to continue to pass the kind of business-friendly reform efforts that will help to create private sector jobs, grow our economy and generate more tax revenue.”

In a statement sent to CapitolBeatOK, state Treasurer Ken Miller remarked: 

“After a couple of hit-and-miss years, it’s good news for budget writers that the state continues to exceed the estimate. As expected, allocations to the General Revenue Fund follow a similar pattern to Gross Receipts with some notable variances due to rebates, remittances and dedicated funding.”

The OSF report showed total, year-to-date GRF collections are $3.541 billion, which is $142.7 million or 4.2 percent above the estimate for the fiscal year and $308.6 million or 9.5 percent above prior year collections for this same period of time.

General Revenue Fund collections for major tax categories in March were:

Income taxes — This source collected $162.6 million in March for the FY-2011 General Revenue Fund, which was $29.1 million or 21.8 percent more than prior year collections from individual and corporate income taxes and $42.2 million or 35 percent above the estimate.

Individual income tax receipts of $95.2 million were $15.2 million and 13.7 percent below the prior year and $26 million or 37.6 percent above the estimate. Corporate returns totaled $67.4 million for the month which was $44.3 million or 191.6 percent more than prior year collections and $16.2 million or 31.7 percent above the estimate.

Sales tax — Sales tax collections produced $129.2 million for the General Revenue Fund, $13.1 million or 11.2 percent more than the prior year and $4.8 million or 3.9 percent above the estimate.

Gross production tax — The March taxes on natural gas and gross production oil accounted for $68.6 million in General Revenue Fund receipts, which was $0.8 million or 1.2 percent below the prior year and $5.4 million or 8.5 percent above the estimate.

Collections of gross production taxes on natural gas totaled $28.1 million, $8 million or 22.2 percent below prior year collections and $11.9 million or 29.7 percent less than the estimate.

Collections of gross production taxes on oil produced $40.5 million, $7.3 million or 21.8 percent above prior year collections and $17.3 million or 74.7 percent more than the estimate.

Motor vehicle taxes — This tax source produced $21.9 million, which was $5.1 million or 30.4 percent above the prior year and $8.6 million or 64.2 percent above the estimate.

Other Revenue — Other revenue produced $56.2 million in March. This was $9.3 million or 14.2 percent below the prior year and $19.1 million or 25.4 percent below the estimate.