General Revenue report indicates “banner year” for Oklahoma’s economy

Revenue Fund collections in April showed robust growth again, confirming the Oklahoma economy is marching toward a banner year with two months remaining in FY-2012.

“We’re on a roll and, barring an international calamitous event, there’s no reason to expect anything will deter our economic progress through the next fiscal year and beyond,” Secretary of Finance Preston Doerflinger said Tuesday (May 15). “Actual receipts for April were almost 12 percent higher than in April 2011, but the diversion of almost $34 million in oil tax revenue by the Legislature reduced the amount going into the GRF.”

Earlier this year, the governor and lawmakers agreed to a supplemental appropriation redirecting $92.6 million in surplus oil funds to meet special needs such as restoring $5,000 bonuses for Nationally Certified teachers and reimbursing local governments for disaster assistance.  The bill also funded common education insurance benefits and a State Trooper Academy. 

“I’m happy to announce that the oil surplus will be sufficient to fund those needs with money to spare,” Doerflinger said.  “Already, $67.7 million in oil revenues have been redirected.  We expect the remaining $24.9 million will be paid out of May collections.”

In comments sent to CapitolBeatOK, Governor Mary Fallin said, “With collections through April of this year now $350 million higher than originally expected, it’s clear that Oklahoma’s economy is quickly rebounding from the national recession.  This puts lawmakers in a great position — not only can they avoid the kind of widespread budget cuts we’ve seen in recent years, they can do so while pursuing a significant reduction in the state income tax.”

“Oklahoma families deserve to keep more of their hard earned money, and reducing taxes will allow them to do so while helping to attract more jobs and investment to the state,” she continued.  “As Oklahoma continues to get good news about our revenue forecast, I would encourage our lawmakers to put that money where it belongs – back in the pockets of our hardworking citizens.” 

In releasing the official monthly General Revenue Fund report, the finance official said he was especially pleased to see continued strong sales tax collections in April.  “Sales taxes were up almost 8 percent for the month and beat the official estimate by the same percentage.  This has been one of our strongest areas of growth all year.”

Doerflinger added:  “Oklahoma has had an exciting and impressive rebound from the after-shock of the national recession.  Unemployment in our state is now almost 3 percent below the nation’s jobless rate, our oilfields are alive with activity, manufacturing jobs are up, and consumer confidence remains high.”

“Illustrating the depth of the recovery, as it pertains to state revenue, is the fact that if you count the diverted oil taxes, we have had double-digit growth for 7 of the first 10 months of the fiscal year and have topped the estimate by double digits on six occasions.”

He said he believes the pro-growth policies of Governor Fallin are contributing to the state’s economic success.

“I think efforts to cut taxes and make government run more efficiently are fostering a new sense of optimism among citizens and businesses alike as they look forward to prosperity for Oklahoma in the years ahead,” Doerflinger said.

Natural gas prices have been a drag on General Revenue Fund collections through most of the current fiscal year, although they have shown recent improvement and actually were up this April over the same month in 2011.

“Predicting prices of commodities is always difficult –there are just too many variables,” Doerflinger said.  “So I would caution against snap judgments on what energy prices will be several months from now.  I’ve read at least one expert concede that anything he forecast would probably turn out wrong.

“I’ve heard some concern over last week’s decline in oil prices.  But the most recent estimate from the Energy Information Administration is that oil will average well over $100 per barrel in 2013, much more than our official estimate.  Anything in the area of $100 would be a bonus for our economy, but there are no guarantees.”

Total collections to the General Revenue Fund through April were $4.6 billion. This amount was $434.6 million and 10.6 percent above collections for the first ten months of FY-2011 and $353.6 million, or 8.4 percent above the total estimate for the same period of FY-2012. 

If the $33.7 million in redirected oil taxes had been counted, year-to-date collections would be 11.4 percent above the prior year and 9.2 percent higher than the estimate.  Totals for the month would be $67.9 million or 11.8 percent above last year and $46.6 million or 7.8 percent above the estimate.

In April, total collections for the General Revenue Fund, minus the diverted oil revenue, were $611 million, an increase of $34.2 million and 5.9 percent from a year ago.  The amount collected for the month was $12.9 million and 2.2 percent more than projected.  

Major tax categories in April (not including oil revenue) contributed the following amounts to the General Revenue Fund:

Income taxes – The total collected from individual and corporate income taxes in the month of April was $357.1 million for the FY-2012 General Revenue Fund, which was $43.5 million or 13.9 percent more than prior year collections and $43 million or 13.7 percent above the estimate. 

Individual income tax receipts of $303 million were $35.5 million and 13.3 percent above the prior year and $14.8 million or 5.2% above the estimate.

Corporate tax collections contributed $54.1 million to the General Revenue Fund for the month, which was $8 million or 17.3 percent above April 2011 collections and $28.1 million or 108.5 percent above the estimate.  

Sales tax — Sales tax collections in April produced $158.7 million for General Revenue Fund, which was $11.6 million or 7.9 percent more than the prior year and $11.6 million or 7.9 percent above the estimate.  Total collections for this source over the first ten months have exceeded the prior year by 9.6 percent and the estimate by 4.5 percent.
Gross production tax – Because all oil collections were diverted this month, the only gross production tax collections to the General Revenue Fund in April were from natural gas.  The total collected from that source was $14.9 million.  This total was $16 million and 51.8 percent below combined oil and gas collections for the same month of the prior year and $36.5 million or 71 percent below the estimate.  

Even with this month’s oil revenue being redirected, the total gross production collections for the first ten months of fiscal year 2012 have exceeded the prior year by $26.2 million or 7.3 percent and have outpaced the estimate by $1.5 million or 0.4 percent.

April tax collections from natural gas were up $10 million and 205.1 percent from gas collections a year ago and missed the estimate by only $269,912 or 1.8 percent. 

Motor vehicle taxes — This tax source produced $19.4 million from April collections, which was $2.9 million or 17.3 percent above the prior year and $0.5 million or 2.4 percent below the estimate. Total motor vehicle tax collections for the first ten months of the fiscal year have exceeded the prior year by 14.6 percent and the estimate by 1.9 percent.

Other Revenue — Other revenue produced $61 million in April. This was $7.7 million or 11.2 percent below the prior year and $4.7 million or 7.2 percent below the estimate.