Collections fall 1.8 percent below estimate for the year
OKLAHOMA CITY – General Revenue Fund (GRF) collections in October missed the official estimate by 10.8 percent and fell below the estimate for the first four months of the fiscal year as oil prices remain low and sales tax collections continue to slide.
As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual appropriated state budget. GRF collections are revenues that remain for the appropriated state budget after rebates, refunds and mandatory apportionments. Gross collections, reported by the State Treasurer, are all revenues collected by the state before rebates, refunds and mandatory apportionments.
GRF collections in October totaled $390.9 million, which is $47.3 million, or 10.8 percent, below the official estimate upon which the Fiscal Year 2017 appropriated state budget was based and $24.1 million, or 5.8 percent, below prior year collections.
Total GRF collections through the first four months of FY 2017 are $1.6 billion, which is $30.5 million, or 1.8 percent, below the estimate and $154.3 million, or 8.7 percent, below prior year collections. At this time last year, receipts were 2.8 percent below the estimate for the first four months of FY 2016.
“While we’re not in as bad of shape as we were at this time last year, there are still some troubling trends, such as oil prices remaining low and sales tax collections continuing to be down,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “While it’s not time to jump to conclusions, we do want to be ready to tackle the challenges ahead.”
October sales tax collections were $10.8 million, or 6.8 percent, below the estimate and $11.3 million, or 7 percent, below the previous year. Sales tax collections have remained below the estimate for 20 of the last 21 months and below the prior year for 19 of the last 21 months. Sales tax makes up about 35 percent of the GRF’s annual collections and a large portion of city service budgets.
Doerflinger, who is Gov. Mary Fallin’s lead budget negotiator with the Legislature, has already been holding meetings with lawmakers well in advance of the legislative session starting in February.
Low oil prices have also contributed to a creeping unemployment rate that saw Oklahoma tied with Wyoming for the biggest increase in unemployment over the past year, according to U.S. Department of Labor numbers. Up by 1 percent for the year ending in September, the state’s unemployment rate stood at 5.2 percent, up one-tenth of a percent from August.
“Such numbers show that Oklahoma’s economic turnaround has not yet begun,” Doerflinger said. “While the state can’t control all facets of the economy, such as oil prices, we can be proactive and prepare.”
Doerflinger is director of OMES, which issues the monthly GRF reports.
Major tax categories in October contributed the following amounts to the GRF:
Total income tax collections of $160.8 million were $15.1 million, or 8.6 percent, below the estimate and $17.2 million, or 9.7 percent, below the prior year.
Individual income tax collections of $160.8 million were $12.1 million, or 7 percent, below the estimate and $17.2 million, or 9.7 percent, below the prior year.
Corporate income tax collections were entirely consumed by refunds and contributed nothing to the General Revenue Fund. This was the case for the same month last year, as well.
Sales tax collections of $149.2 million were $10.8 million, or 6.8 percent, below the estimate and $11.3 million, or 7 percent, below the prior year.
Gross production tax collections of $12.9 million were $4 million, or 23.6 percent, below the estimate and $1.9 million, or 17.6 percent, above the prior year.
Natural gas collections of $11.3 million were $5.6 million, or 32.9 percent, below the estimate and $578,000, or 5.4 percent, above the prior year.
Oil collections of $1.6 million were almost entirely above the estimate and prior year. Since the GRF received only minimal contributions from oil tax collections in October 2015, a very small amount was estimated for current month collections.
Motor vehicle tax collections of $15.7 million were $1.5 million, or 8.5 percent, below the estimate and $1.1 million, or 6.3 percent, below the prior year.
Other revenue collections of $52.4 million were $16 million, or 23.4 percent, below the estimate and $3.5 million, or 7.1 percent, above the prior year.
Revenue tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/October_2016_Financial_Report_Data_Tables.html.
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