As Gov. Mary Fallin calls a special session to presumably raise taxes, state revenue is growing – a development that may take care of the budget deficit.
State Treasurer Ken Million reports that total revenue for the state during the past 12 months are higher than collections during the prior 12 months for the first time since August 2015, and monthly gross receipts topped collections from the same month of last year for a seventh time since January.
State revenues for the past 12 months exceeded collections from the prior 12 months by $79 million, or 0.7 percent, and collections during August were more than the same month of last year by $47.4 million, or 5.7 percent, Miller said.
“Oklahoma’s economic recovery, slow and steady, continued through August,” Miller said. “The energy sector remains the primary driver of the state’s economic expansion as evidenced by the continued rise in oil field employment and gross production tax payments.”
A vibrant energy industry seems to be fueling the increase in tax collections.
August gross production tax collections are higher than the prior year for an eleventh consecutive month. Monthly receipts from the production of oil and natural gas generated $43.8 million, an increase of $11.9 million, or 37.6 percent. In the past 12 months, gross production receipts are up by $119 million, or 34.3 percent.
In August, sales and individual income tax collections were also ahead of the prior year, while corporate income and motor vehicle tax payments were lower. During the last 12 months, gross production, sales and motor vehicle taxes are all higher than the prior period. Only individual and corporate income tax receipts remain below those of the previous 12 months.
Increased taxation enacted last session had an impact on revenue for the first time in August, adding $16.7 million to the bottom line. The largest amount, $10.7 million, came from the new 1.25 percent state sales tax on motor vehicles. A $5 fee on motor vehicle registration boosted collections by $1.7 million for the month.
Elimination and suspension of gross production tax rebate payments added $3 million to gross collections. Beginning next month, the state will start to see the impact of raising the 1 percent horizontal drilling gross production tax rate to 4 percent.
Ending a discount for businesses that remit sales tax generated an additional $1.2 million for the month. A new fee assessed on professional sports tickets contributed $34,855.
But those new taxes didn’t account for the total increase in revenue.
Oklahoma’s seasonally-adjusted unemployment rate rose by one-tenth of a percentage point to 4.4 percent in July, according to figures released by the Oklahoma Employment Security Commission. State jobless numbers improved by seven-tenths of a percentage point over the year. The U.S. jobless rate was set at 4.3 percent for the month.
After no growth in July, the Oklahoma Business Conditions Index grew in August. The overall index was set at 56.2 from 49.4 in July. Numbers above 50 indicate anticipated positive economic growth in the next three to six months. The index has been above 50 during seven of the past eight months.
Tax revenue for August was $879.7 million, up $47.4 million, or 5.7 percent, from August 2016. Income tax collections, a combination of personal and corporate income taxes, generated $253.6 million, a decrease of $$638,000, or 0.3 percent, from the previous August.
Individual income tax collections for the month are $246.7 million, up by $4.1 million, or 1.7 percent, from the prior year. Corporate collections are $6.8 million, a decrease of $4.7 million, or 40.7 percent.
Sales tax collections, including sales tax for cities and counties, total $380.9 million in August. That is $29.6 million, or 8.4 percent, more than August 2016. Gross production taxes on oil and natural gas generated $43.8 million in August, an increase of $11.9 million, or 37.6 percent, from last August. Compared to July reports, gross production collections are up by $1.8 million, or 4.4 percent.
Motor vehicle taxes produced $67.9 million, down by $729,000, or 1.1 percent, from the same month of last year.
Other collections, consisting of about 60 different sources including use taxes, along with taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $133.5 million during the month. That is $7.2 million, or 5.7 percent, more than last August.
Gross taxation revenue was $11.1 billion from the past 12 months. That is $79 million, or 0.7 percent, more than collections from the previous 12 months. That is almost enough to make up for the projected revenue lost when the tobacco tax increase was ruled unconstitutional by the Oklahoma Supreme Court.
Gross income taxes generated $3.9 billion for the September 2016-August 2017 period, reflecting a decrease of $147 million, or 3.6 percent, from the September 2015-August 2016 period.
Individual income tax collections total $3.5 billion, down by $38.3 million, or 1.1 percent, from the prior 12 months. Corporate collections are $399 million for the period, a decrease of $108.7 million, or 21.4 percent, over the previous period. Sales taxes for the period generated $4.3 billion, an increase of $36.7 million, or 0.9 percent, from the prior year.
Oil and gas gross production tax collections brought in $466.1 million during the past 12 months, up by $119 million, or 34.3 percent, from the previous 12-month period.
Motor vehicle collections total $760.4 million for the period. This is an increase of $7.3 million, or 1 percent, from the trailing period. Other sources generated $1.6 billion, up by $62.9 million, or 4 percent, from the previous 12 months.