In the grip of a pandemic, state revenues fell by almost 5% in Oklahoma in August, State Treasurer Randy McDaniel said.

Oil and gas production made the biggest drop.

August receipts from all sources were $979.5 million and are below collections from August 2019 by $47.3 million, or 4.6 percent. It marks the fifth time since February, the start of the national coronavirus plague, that total receipts have been less than those of the prior year.

Collections from the gross production tax, the state’s severance tax on oil and natural gas, fell by 46.3 percent, generating $40.7 million, or $35.1 million less than a year ago. Monthly gross production receipts have been less than the same month of the prior year for 12 consecutive months.

“The gross receipts report provides evidence of the challenges facing Oklahoma’s anchor industry,” McDaniel said. “Oil and gas tax receipts have dropped by more than $430 million during the past year. We will likely see a growing ripple effect into other sectors of the economy.”

August oil and gas receipts reflect production during June, when West Texas Intermediate crude oil averaged $38.11 per barrel. Prices rose to $42.34 in August, but drilling and energy-related employment have continued to drop. July reports show 34,100 oil field employees in Oklahoma, down by 14,400 over the year.

Rigs counts were set at 11 in August, a sharp reduction production activity during June, from 80 rigs last August.

In addition to gross production collections, receipts from sales tax and motor vehicle taxes were below those of August 2019 by 4.4 percent and 8.2 percent respectively. Gross income tax receipts rose by 4.8 percent and use taxes paid on out-of-state purchases increased by 2 percent in August compared to the prior year.

Gross receipts from the past 12 months total $13.27 billion, down by $455.8 million, or 3.3 percent, from the trailing 12-month period. All major revenue sources except for corporate income tax and use tax are less than those of the previous 12 months.

The unemployment rate in Oklahoma was reported as 7.1 percent in July, up from 6.4 percent in June. The seasonally adjusted number of Oklahomans listed as jobless was reported as 128,087, according to figures released by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate was listed at 10.2 percent in July.

August collections

Compared to gross receipts from August 2019, collections in August 2020 showed:

  • Total August 2020 gross collections are $979.5 million, down $47.3 million, or 4.6 percent.
  • Individual income tax collections are $261.1 million, up by $2 million, or 0.8 percent.  Corporate collections are $17.7 million, an increase of $10.9 million, or 160.7 percent.
  • Combined sales and use tax collections total $466.4 million – a reduction of $17.2 million, or 3.6 percent.

Sales tax collections total $401 million, a decrease of $18.5 million, or 4.4 percent.

  • Use tax receipts, collected on out-of-state purchases including online sales, generated $65.4 million, an increase of $1.3 million, or 2 percent.
  • Gross production taxes on oil and natural gas total $40.7 million, a decrease of $35.1 million, or 46.3 percent.
  • Motor vehicle taxes produced $64.2 million, down by $5.7 million, or 8.2 percent.
  • Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana, and alcoholic beverages, produced $129.3 million – down by $2.2 million, or 1.7 percent.

Twelve-month collections

Gross revenues for the past 12 months (September 2019 through August 2020) compared to the prior 12 months showed:

  • Gross revenue totals $13.27 billion. That is $455.8 million, or 3.3 percent, below collections from the previous 12-month period.
  • Gross income taxes generated $4.75 billion, reflecting an increase of $119.7 million, or 2.6 percent. Individual income tax collections total $4.1 billion, down by $16.1 million, or 0.4 percent. Corporate collections are $651.9 million, an increase of $135.8 million, or 26.3 percent.
  • Combined sales and use taxes generated $5.47 billion, a drop of $139.2 million, or 2.5 percent.  Gross sales tax receipts total $4.71 billion, down by $182.7 million, or 3.7 percent. Use tax collections generated $752 million, an increase of $43.5 million, or 6.1 percent.
  • Oil and gas gross production tax collections generated $736.3 million, down by $432.8 million, or 37 percent.
  • Motor vehicle collections total $777.9 million. This is a decrease of $10.5 million, or 1.3 percent.
  • Other sources generated $1.54 billion, up by $7 million, or 0.5 percent.