State Revenue in November climbs above prior year but misses estimate

CapitolBeatOK Staff Report

Published: 14-Dec-2010

State revenue collections show Oklahoma’s economy continues to recover from the deepest recession since World War II, but growth is slow, State Treasurer Scott Meacham said today (Tuesday, December 14) as he released reports for collections in November.

This report was the final formal monthly report of Treasurer Meacham’s tenure. He will leave office January 10, when his successor, Ken Miller, takes office.

Still ahead for Meacham is his last session as a member of the Board of Equalization. That meeting is set for next Tuesday, December 21, when the board will certify a preliminary estimate for Fiscal year 2012 tax revenue. That number will become the benchmark from which incoming Governor Mary Fallin will establish an executive budget for presentation to the Legislature in February.

The present members of the Board of Equalization (and, in parentheses, their successors) are: Governor Brad Henry (Fallin), Lt. Gov. Jari Askins (Todd Lamb), Meacham (Miller), Attorney General Drew Edmondson (Scott Pruitt), Schools Superintendent Sandy Garrett (Janet Barresi) and Agriculture Secretary Terry Peach (Jim Reece).

While the Dec. 21 session will set preliminary revenue certification, the February meeting of the Board of Equalization will establish the final revenue estimate for legislative budgeting in Fiscal Year 2012. Among potential issues at that meeting will be certifying whether or not state income taxes have grown enough in FY 2011 to allow an income tax cut “trigger” that would lower the income levy from a maximum 5.5% to 5.25%.

In today’s statement on November revenue, Meacham reflected, “We are in much better shape than this time last year when collections were falling for an 11th consecutive month and budgets were being slashed across-the-board,” Meacham said. “But we continue to see evidence the state’s economic recovery still has a ways to go.”

Preliminary reports show General Revenue Fund collections in November were $345.9 million. That amount is:

   *    $29.5 million or 9.3 percent above the prior year; but,

   *    $9.7 million or 2.7 percent below the estimate.

Fiscal year-to-date collections total $1.91 billion. That is $113.7 million or 6.3 percent above the prior year and $49.3 million or 2.7 percent above the estimate.

Reports show collections in all but one of the four major tax categories exceeded prior year receipts in November.

“Income tax collections, after showing strength in October, dropped below the prior year and estimate during November primarily due to an increase in refunds and Quality Jobs payments,” Meacham said. “We see good news, however, in sales tax collections that continue to exceed the prior year and the estimate.”

Sales tax collections during the holiday shopping season are not yet reflected in the reports.

In November, net income taxes, a combination of personal and corporate income taxes, produced $132 million, which is $5.4 million or 3.9 percent below the prior year and $7.7 million or 5.5 percent below the estimate.

Personal income tax collections for the month are $131 million. That is $6.4 million or 4.6 percent below the prior year and $8 million or 5.7 percent below the estimate. Corporate income tax collections produced $1 million during the month. That is $0.2 million or 29.1 percent above the estimate. In November of last year, corporate income tax collections were recorded as zero.

The state sales tax produced $134.8 million for the month, which is $11.6 million or 9.5 percent above the prior year and $4.8 million or 3.7 percent above the estimate.

The gross production tax on natural gas yielded $20.1 million for the month, which is $9.8 million or 95.3 percent above the prior year but $4.9 million or 19.6 percent below the estimate.

Motor vehicle taxes produced $13.2 million in November, which is $1.6 million or 14 percent above the prior year and $1.6 million or 13.7 percent above the estimate.

Other revenue, including investment earnings along with taxes on insurance, alcoholic beverages and others produced $45.8 million for the month. This is $11.8 million or 34.7 percent above the prior year but $3.5 million or 7.1 percent below the estimate.

NOTE: Editor Patrick B. McGuigan contributed to this report.