State tax revenues continue to fall and Oklahoma is now officially in a recession, said State Treasurer Ken Miller.
“The latest GDP data show Oklahoma entered a recession starting in spring of last year. We will get new data late this month to show whether the recession continued into first quarter of this year; however, there is no indication of any marked recovery at this point,” Miller said.
Revenue from income taxes, sales taxes, gross production taxes (oil and gas) and motor vehicle taxes are all smaller than the same month last year (and the last fiscal year).
The monthly bottom line has been less than the same month of the prior year for 14 consecutive months. The 12-month total has contracted for 14 consecutive months, as well.
The federal Bureau of Economic Analysis issued state gross domestic product (GDP) figures in June showing the Oklahoma economy contracted starting in second quarter of 2015 and continued to do so through the fourth quarter of the year. Recessions are typically defined as two consecutive quarters of GDP reduction.
Collections from gross production taxes on crude oil and natural gas remain below prior year numbers, but have risen slightly for two months in a row after hitting a 17-year low in April. June receipts are based on oil prices in April, when the spot price of West Texas Intermediate crude oil was $40.75 per barrel.
June gross receipts are $925,700,000.00, down by almost $74,000,000.00 or 7.4 percent from June 2015. It is the lowest June total in six years.
Fiscal Year 2016 collections are $11,100,000,000.00, down by more than $860,000,000.00 or 7.2 percent from FY-15. It marks the lowest 12-month total in 39 months – since March 2013 – and is down by more than $980,000,000.00 or more than 8 percent from the last peak of $12,100,000,000.00 in February 2015.
After almost 13 years with unemployment rates below the national average, Oklahoma’s monthly jobless rate climbed by two-tenths of one percentage point in May to match the U.S. rate. The state and national rates were set at 4.7 percent in May, the first time both numbers have been the same since September 2003.
After rising in May, the Business Conditions Index for Oklahoma fell into negative territory during June. The index based on a survey of supply managers dropped to 48.1 in June from 51.4 in May. Numbers below 50 mean economic contraction is expected during the next three to six months.
The report for June shows gross receipts at $925,700,000.00, down $73,600,000.00 or 7.4 percent from June 2015.
Gross income tax collections, a combination of individual and corporate income taxes, generated $353,400,000.00, a drop of $53,500,000 or 13.1 percent from the previous June.
Individual income tax collections for the month are $285,400,000.00, down $22,400,000.00 or 7.3 percent from the prior year. Corporate collections are $68,000,000.00, down by $31,100,000.00 or 31.4 percent.
Sales tax collections, including funds from cities and counties, total $351,100,000.00 million in June. That is $13,500,000.00 or 3.7 percent below June 2015.
Gross production taxes on oil and natural gas generated $25,500,000.00 in June, a decrease of $10,500,000.00 or 29.1 percent from last June. Compared to May reports, gross production collections are up by $1,400,000.00 or 5.7 percent.
Motor vehicle taxes produced $65,800,000.00, down by $3,600,000.00 or 5.1 percent from the prior year.
Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $129,900,000.00 during the month. That is $7,400,000.00 million or 6.1 percent more than last June.
During Fiscal Year 2016 (July 2015 through June 2016), gross revenue totals $11,100,000,000.00. That is $863,000,000.00 or 7.2 percent below collections for the previous 12-month period.
Gross income taxes generated $4,100,000,000.00 for the period, reflecting a drop of $280,100,000.00 or 6.4 percent from Fiscal Year 2016.
Individual income tax collections total $3,600,000,000.00, down by $209,600,000.00 or 5.5 percent from the prior fiscal year. Corporate collections are $527,000,000.00 for the period, a decrease of $70,400,000.00 or 11.8 percent from the previous period.
Sales taxes for FY-16 generated $4,300,000,000.00, a decrease of $177,800,000/00 or 4 percent from FY-15.
Oil and gas gross production tax collections brought in $366,600,000.00 during the 12 months, down by $331,200,000.00 or 47.5 percent from the previous period.
Motor vehicle collections total $758,800,000.00 million for the period. This is a decrease of $7,400,000.00 million or 1 percent from the trailing 12 months.
Other sources generated $1,600,000,000.00, down $66,500,000.00 million or 4 percent from the previous 12 months.
The General Revenue Fund receives about half of the state’s gross receipts with the remainder paid in rebates and refunds, remitted to cities and counties, and placed into off-the-top earmarks to other state funds.