State Sales Tax Collections continue to surge
Published: December 11th, 2012
Oklahoma consumers stayed the course in November as sales tax collections for the month beat the official estimate by 8.4 percent, Secretary of Finance Preston L. Doerflinger said Tuesday (December 11) as he released his monthly General Revenue Fund report.
“We may have gotten a little bump from early Christmas shopping, but consumer confidence has been a consistent feature of our recovery from the Great Recession over the last two years. So far, that confidence has not been shaken by the fiscal mess in Washington,” Doerflinger said.
Total collections in November were down from the same month in 2011, but the decline was not due to economic factors. It was tied mostly to the General Revenue Fund receiving zero funds from gross production taxes because of lower prices and refunds that wiped out contributions from natural gas taxes.
Combined personal and corporate income taxes were down 4.1 percent from last year in November, but officials believe that was due to timing issues. Income tax collections can vary greatly from month to month. In another sign of consumer confidence, motor vehicle taxes increased by 2.2 percent.
“With the exception of energy taxes, key revenue figures are growing.” Doerflinger said. “Both sales and income taxes are up more than 8 percent for the first five months of the current fiscal year, compared to the same time period a year ago, and revenue from motor vehicle sales has increased by more than 6 percent. Also, total collections for the five-month period are running $33 million above the estimate.”
Oklahoma’s recovery has been fueled by a revival in the oil patch and growth in the manufacturing sector. The state’s 5.3 percent unemployment rate is lower than any of its six bordering states and compares to a national jobless rate of 7.7 percent.
“We are still adding jobs and I believe our economy is in good shape moving forward, especially if major players in the energy industry follow through with plans to step up drilling activity in the state next year,” Doerflinger said. “It would be a shame if Washington goes over the so-called fiscal cliff and a prolonged budget stalemate leads to another recession.”
He added: “I know that business owners want economic stability when they are considering important investment decisions. From my perspective, President Obama has been playing hardball with Congress and scoring political points, but he’s throwing a curveball at Oklahoma and other states that have out-performed the national economy and kept their fiscal houses in order.”
The finance secretary pointed out that the state’s Rainy Day Fund was depleted when Gov. Mary Fallin took office in January, 2011, and now has a near-record $577.5 million in it. The state also has added more than 57,000 jobs.
Doerflinger is director of the Office of Management and Enterprise Services, which is responsible for crafting the executive budget that the governor will submit to the Oklahoma Legislature in February. The General Revenue Fund is the starting point for building the state budget. It is where all state taxes and fees flow, except for revenue dedicated or earmarked for specific programs.
“We have prepared for a federal budget train wreck and cuts in federal funds that would impact state agencies,” the finance official said. “Right now, those cuts are estimated to range from $137 million to $200 million.
“If Washington goes over the cliff, the effect on Oklahoma will depend on how long the crisis lasts. It’s unthinkable that it would go on for several months, threatening thousands of defense-related jobs in the state. All we can do is to continue pursuing the governor’s pro-growth agenda independent of national events.”
Governor Fallin said, “As the latest revenue reports show, the Oklahoma economy continues to perform well. We expect a successful holiday shopping season will further boost state revenue figures as well. While the economic news for our state is positive now, Washington’s inability to reach a deal on the ‘fiscal cliff’ poses a serious threat to the state’s economy. If the president and Congress fail to reach a deal, the state could lose $137 million in federal funding.
“Automatic spending cuts also undoubtedly would cost thousands of jobs and threaten our nation’s economic recovery. We are optimistic about Oklahoma’s economy, but that optimism is tied to the assumption Washington can get something done. We continue to hope our momentum is not impeded by the impasse in Washington.”
Total collections to the GRF in November were $369 million, a decrease from a year ago of $55 million or 13 percent. Receipts for the month fell short of the estimate by $28.1 million or 7.1 percent.
Total General Revenue Fund collections for the first five months of fiscal year 2013 are $2.1 billion, $30.4 million or 1.4 percent less than total collections for the same period of FY-2012. The five-month collections exceeded the estimate by $33.1 million or 1.6 percent.
According to information Doerflinger’s office provided to CapitolBeatOK, major tax categories in November contributed the following amounts to the General Revenue Fund:
Income taxes – The total collected from individual and corporate income taxes in the month of November was $152.2 million for the FY-2013 General Revenue Fund, which was $6.5 million or 4.1 percent less than prior year collections and $97,262 or 0.1 percent above the estimate.
Individual income tax receipts of $150.2 million were $8.6 million or 5.4 percent below the prior year and $2.1 million or 1.4 percent above the estimate.
Corporate tax collections contributed $2.1 million to the General Revenue Fund, which was $2.1 million or 100 percent above November 2011 collections and $2 million or 49.3 percent below than the estimate.
Sales tax — Sales tax collections in November produced $159.4 million for the General Revenue Fund, which was $12.8 million or 8.4 percent more than the prior year and $3.8 million or 2.4 percent above the estimate.
Gross production tax – Gross production tax collections from natural gas made no contribution to the General Revenue Fund for the month. Gross collections from this source were almost entirely expended as refunds. Oil collections made no contribution to the General Revenue Fund because the first $150 million in oil receipts are earmarked to education.
Motor vehicle taxes — This tax source produced $16.6 million from November collections, which was $400,000 or 2.2 percent above the prior year and $300,000 or 2.1 percent above the estimate.
Other Revenue — Other revenue produced $40.9 million for the General Revenue Fund in November. This amount was $2 million or 4.8 percent below the prior year and $15.7 million or 27.8 percent below the estimate.
This month the state incurred the second payment of Oklahoma’s Promise (OHLAP) funds in the amount of $13.25 million.