Income tax refunds, drop in natural gas production reduce total GRF receipts; sales taxes still healthy
OKLAHOMA CITY – Secretary of Finance and Revenue Preston L. Doerflinger announced Tuesday that higher than expected income tax refunds and a continued drop in natural gas production reduced General Revenue Fund collections in February, while sales tax collections again came in at a healthy pace.
Collections to the General Revenue Fund (GRF) totaled $254.6 million in February, which is $28.9 million or 10.2 percent below collections for February of Fiscal Year 2012, and $20.4 million or 7.4 percent lower than the official estimate upon which the FY 2013 budget is based.
Total GRF collections for the first eight months of Fiscal Year 2013 are $3.5 billion, which is $29.3 million or 0.8 percent below total collections for the same period a year ago, but $77.6 million or 2.3 percent higher than the official estimate.
“Big picture, revenues for the budget are still on pace above estimated levels,” Doerflinger said.
Doerflinger also pointed out that sales tax collections in February increased by 4.5 percent over the same month a year ago and are up 6.5 percent over the first eight months of the fiscal year.
“Strong consumer spending and low unemployment are key indicators of a healthy economy,” he said. “Our 5.1 percent jobless rate is the best of any state in our region and Oklahomans’ incomes are up because of growth in jobs in such areas as energy, manufacturing and aviation. Oklahoma’s economy and state revenues continue to thrive under the pro-growth policies of the Fallin administration, although we remain susceptible to national events beyond our control, such as potential defense sector downturns caused by federal budget cuts.”
Large shifts in February income tax collection figures were caused mostly by an isolated remittance issue.
“February’s figures are not as alarming as they look when you consider how income tax remittances can often vary greatly from month to month,” Doerflinger said. “This February we had an anomaly with an estimated $12 million in personal income tax refunds that would normally have been made in January if taxpayer filings had not been delayed because of the late deal in Washington to avert the so-called fiscal cliff. Overall, the first eight months of the current fiscal year have personal income tax collections running more than 11 percent ahead of the official estimate. Combined corporate and individual income tax collections are beating the estimate by more than 15 percent.”
While other sectors of Oklahoma’s economy are thriving, the state’s natural gas industry has been pressured by low prices for more than two years now, leading energy companies to switch to drilling for more profitable oil. This has had an adverse effect on the GRF since 85.7 percent of all gross production tax receipts on natural gas flow into the GRF. The first $150 million in gross production tax collections on oil is earmarked for education, and that threshold must be met before the GRF gets any money from crude production.
Natural gas receipts to the GRF totaled $10.4 million in February, compared with $18.8 million collected during the same month a year ago. For the first eight months of the current fiscal year, natural gas collections are down $184 million or 86 percent from last year and are running $118 million or almost 80 percent below the estimate. Oil revenue fell in February and is down for the eight-month period compared to a year ago, but it is beating the estimate by $13.3 million or nearly 31 percent over eight months.
The latest weekly rotary rig count by Baker Hughes listed 29 natural gas rigs actively exploring or developing natural gas in Oklahoma, down 27 rigs from the same period in 2012.
“Economists are painting a bright long-range future for the natural gas industry, with some predicting an increase in demand and more favorable pricing,” Doerflinger said. “We look forward to that day, since natural gas has traditionally been such a significant contributor to the General Revenue Fund.”
Doerflinger is director of the Office of Management and Enterprise Services, which generates the monthly GRF reports. The GRF is state government’s main operating fund and is made up of about 70 revenue sources. It is where all state taxes and fees flow, except for those earmarked or dedicated to specific programs.
Major tax categories in February contributed the following amounts to the General Revenue Fund:
Income taxes – The total collected from individual and corporate income taxes in the month of February was $19.2 million, which was $14.1 million or 42.3 percent less than prior year collections and $9.5 million or 98.1 percent above the estimate.
Individual income tax receipts of $18.3 million were $13.7 million or 42.8 percent below the prior year and $15.3 million or 510 percent above the estimate.
Corporate tax collections contributed $885,000 to the GRF, which was $0.4 million or 30.2 percent below February 2012 collections and $5.8 million or 86.8 percent below the estimate.
Sales tax – The Tax Commission apportioned $151.3 million in sales tax collections to the GRF for month of February, which was $6.5 million or 4.5 percent higher than the prior year and $0.3 million or 0.2 percent above the estimate.
Gross production tax – Gross production tax collections from February contributed $36.1 million to the GRF after rebates. This amount was $17.7 million or 33 percent lower than February collections for last year and $13.7 million or 27.5 percent below the estimate.
Collections from natural gas accounted for $10.4 million, which was $8.4 million or 44.6 percent below prior year collections and $3.8 million or 26.7 percent below the estimate.
Collections from gross production oil taxes contributed $25.7 million to the General Revenue Fund. This amount was $9.2 million or 26.4 percent less than collections for February of 2012 and $9.9 million or 27.8 percent below the estimate.
Motor vehicle taxes – Motor vehicle taxes produced $12.6 million from February collections, which was $5.2 million or 29.4 percent less than the prior year and $2.8 million or 18.2 percent below the estimate.
Other Revenue – Other revenue produced $35.4 million for the GRF in February. This amount was $1.5 million or 4.6 percent above the prior year and $13.7 million or 27.9 percent below the estimate.
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Mar. 12, 2013
FOR IMMEDIATE RELEASE
Public Information Officer
(405) 521-3267 firstname.lastname@example.org