2018’s historic tax hike is helping set revenue records

Despite the recent bad weather, state revenues rose again in May by more than 10 percent – a record high – from May of 2018, according to State Treasurer Randy McDaniel.

May revenues totaled $1.1 billion, up $102.7 million, or 10.6 percent, from May 2018. Individual income tax revenues rose to $272 million – up $16.1 million (6.3 percent) and corporate income taxes soared to $32.9 million – up $7 million (27.1 percent)

“Our hearts go out to the flood victims and we remain encouraged by the strength and resiliency of fellow Oklahomans during difficult times,” McDaniel said. “Due to the timing of the immense flooding, which began late in May, we have yet to see any impact on gross revenue collections. We would expect to begin seeing any effect in next month’s report.”

Receipts from the past 12 months, at $13.5 billion, are up by 12 percent over the prior period – also a record high.

During May, three of the four major revenue streams showed increases over the same month of last year. Income, sales, and gross production taxes showed growth, while motor vehicle taxes were down. Tax commission officials said the reduction in motor vehicle receipts is likely not an indicator of a change in current economic conditions.

May gross production taxes generated $93.9 million, up by 26.8 percent from the prior year. Those receipts are based on the production of crude oil and natural gas in March, when the spot price for West Texas Intermediate Crude Oil at Cushing averaged $58.15 per barrel. The oil and gas receipts show a rebound of almost 18 percent from collections during the prior month.

Total gross collections during the past 12 months reflect growth in all major revenue streams, ranging from 67.6 percent in gross production receipts to 1.8 percent in motor vehicle taxes.

Revenue generated House Bill 1010 in 2018 – the biggest tax hike in state history – added $58.4 million to monthly collections, 5.4 percent of all May gross receipts.

The largest amount, $31.1 million, came from the increase in the incentive tax rate on oil and natural gas gross production. Higher tax rates on gasoline and diesel fuel generated $12.4 million, and the $1 per pack hike in cigarette taxes added $14.9 million to the May total.

Oklahoma’s seasonally adjusted unemployment rate of 3.3 percent in April was unchanged from the previous month, while the U.S. jobless rate of 3.6 percent was down by two-tenths of one percentage point from March, according to figures released by the Oklahoma Employment Security Commission.

In May, sales tax revenues were $412.8 million. That is $21.7 million, or 5.5 percent, more than May 2018.

Gross production taxes on oil and natural gas generated $93.9 million in May, an increase of $19.8 million, or 26.8 percent, from last May.

Compared to April 2019 reports, gross production collections are up by $14.1 million, or 17.7 percent.

Motor vehicle taxes produced $63.2 million, down by $6.5 million, or 9.4 percent, from the same month of 2018.

Other collections, consisting of about 60 different sources including use taxes, along with taxes on fuel, tobacco, and alcoholic beverages, produced $198.8 million during the month. That is $44.6 million, or 28.9 percent, more than last May.

For the past 12 months, state revenues total $13.5 billion. That is $1.5 billion, or 12 percent, more than collections from the previous 12 months.

Gross income taxes generated $4.6 billion for the period, reflecting an increase of $349 million, or 8.2 percent, from the prior 12 months.

Individual income tax collections total $4.1 billion, up by $283.7 million, or 7.5 percent, from the prior 12 months. Corporate collections are $525.3 million for the period, an increase of $65.4 million, or 14.2 percent, over the previous period.

Sales taxes for the 12 months generated $4.9 billion, an increase of $263.1 million, or 5.7 percent, from the prior period.

Oil and gas gross production tax collections brought in $1.1 billion during the 12 months, up by $455.6 million, or 67.6 percent, from the previous period.

Motor vehicle collections total $784.5 million for the period. This is an increase of $14 million, or 1.8 percent, from the trailing period.

Other sources generated $2.1 billion, up by $373.1 million, or 21.1 percent, from the previous year.