On his first full day on the job, new State Treasurer Ken Miller got to announce relatively good news on the state revenue front. December General Revenue (GR) collections were up 13.0 percent from one year ago and were 4.3 percent above the certified estimate.
As can be seen from this chart, December’s collections represent the largest month-over-month increase since the recovery began:
Earlier this month, we released a brief that provided our projections for state revenue collections for Fiscal Years 2011 through 2014. Last week, the State Board of Equalization certified its official preliminary revenue estimates for FY ’12, along with updated projections for FY ’11, which we discussed in this blog post. The Board’s forecasts are very closely aligned with ours. For FY ’11, our middle forecast is for General Revenue collections of $4.969 billion, compared to $4.949 billion projected by the Board, a difference of $20 million, or a mere 0.4 percent. For FY ’12, we are forecasting GR of $5.121 billion, which is $19 million, or 0.4 percent, above the official estimate certified by the Board of Equalization.
We point this out for two reasons. First, to unabashedly toot the horn of our forecasting guru, Paul Shinn, for developing a methodology that so closely anticipates the numbers developed for the Board of Equalization (you can read the technical memorandum explaining his methodology by clicking here). This is the second year of our forecasting project; last year, Paul’s middle forecast for FY ’10 GR came in within 3.5 percent of actual full-year collections. Read the rest of this entry »
Yesterday’s announcement of state General Revenue (GR) collections for the month of November showed that the state continues to recover only slowly and partially from the depths of the downturn. Outgoing State Treasurer Scott Meacham chose to highlight that November collections this year were 9.3 percent above last year’s; for the first five months of the fiscal year, FY ’11, GR is up 6.3 percent from FY ’10. But as we see from the chart, FY ’11 collections remain substantially below pre-downturn levels. Year-to-date GR is 24.0 percent below the same period of two years ago (FY ’11) and remains below levels of six years ago.
As we discussed in our recent forecasting brief, it is going to take a long time, likely several more years, before revenues recover to nominal pre-downturn levels under current policies. Facing this extended period of sluggish revenue collections, the need for a revenue structure that is capable of supporting the cost of core public services will be increasingly vital and urgent.
We’re nowhere close to being out of the woods. That’s been our message of late on the state’s budget outlook (you can take a look here at our blog post analyzing of the most recent monthly revenue collections and here at the memo (PDF) on the budget we distributed to candidates). While revenue collections over the past 8 months have rebounded 5 to 10 percent from the previous year, they remain well below pre-downturn levels. And even though revenues are recovering, the use of over $1 billion in non-recurring revenues from the federal stimulus bill and state Rainy Day Fund in this year’s budget to avert catastrophic budget cuts ensures that Oklahoma policymakers will face substantial shortfalls in building next year’s budget. Read the rest of this entry »
The latest revenue collections announced today (PDF) by Treasurer Scott Meacham continue to confirm that while revenues are recovering from their precipitous drop during the worst of the downturn, the recovery is slow and far from complete.
September’s General Revenue (GR) collections totaled $459.7 million, which is $25.9 million, or 6.0 percent, above last year and $7.5 million, or 1.7 percent, above the certified estimate. For the now-completed first quarter of FY ’11, collections are running $74.8 million, or 6.8 percent, ahead of last year, and $45.4 million, or 4.0 percent, above the certified estimate that formed the basis of this year’s appropriations.
As can be seen from the first chart, monthly collections have come in between 5 and 10 percent above the same month for the prior year in four of the past five months. While this shows that a recovery is under way, the gains have been far less than we might hope given the magnitude of the drop between January 2009 and February 2010.
In 2004, Oklahoma voters approved a series of measures intended to raise new revenues for education and health care through a state lottery (SQ 705 and 706), gaming compacts (SQ 712), and increased tobacco taxes (SQ 713). OK Policy has now released a set of newly updated fact sheets that explains how these revenue sources operate and sets out out how much revenue each generates and where the dollars are allocated. You can access all three 1-page fact sheets as a single document, or you can download the PDF separately for the lottery, gaming and tobacco.
We found that during the most recently completed budget year, FY ’10, Oklahoma collected $335.4 million from these three revenue sources. This is an increase of $12.2 million, or 3.8 percent, from FY ’09, reflecting a clear slowdown in revenue growth from these sources compared to prior years. Some key findings:
Treasurer Scott Meacham today announced that General Revenue (GR) collections for the first month of the new state fiscal year, FY ’11, came in 9.9 percent above the prior year and 11.9 percent above the official certified estimate. The sales tax and corporate income tax saw the strongest growth compared to July 2009, while personal income tax collections were off by 0.1 percent from a year ago, likely reflecting the persistence of weak employment numbers.
Although one must be careful of drawing conclusions based on a single month, July’s collections confirm that revenues are continuing the upswing seen in recent months and should further dispel fears that the state will face a third consecutive year of revenue shortfalls requiring mid-year cuts. It now seems far likelier that the economic projections made in February that formed the basis of this year’s budget underestimated the speed and strength of the economic recovery. If GR continues to come in above 100 percent of the estimate over the course of the full year, the surplus will go to replenishing the Rainy Day Fund. Read the rest of this entry »
Last week, Treasurer Scott Meacham presented the preliminary data on full-year collections to the state’s General Revenue fund for FY ’10, which ended June 30th. He emphasized both the magnitude of the decline in collections from the prior year – $945 million, or 17 percent – and the shortfall in collections compared to the initial certified estimate for the year, which, at 15 percent, may have been the largest mid-year shortfall in state history.
We’ve now gone further back to see where the drop in state revenue collections leaves us. The numbers are pretty striking:
The latest edition of our monthly Numbers You Need bulletin reports on the most recent state personal income data that was put out last month by the Bureau of Economic Analysis. In the 1st quarter of 2010, state personal income grew by a healthy 0.9 percent in both Oklahoma and the nation, showing the strongest rate of growth since the 2nd quarter of 2008. Personal income grew in all but two states (North Dakota and South Dakota), with Mississippi leading the way (+1.6 percent). Oklahoma’s growth for the quarter ranked 28th among the states.
As can be seen in this chart, state personal income remains slightly below pre-downturn levels. Oklahoma’s state personal income of $131.2 billion in the 1st quarter was 99.2 percent of the amount in the 3rd quarter of 2008 (amounts are seasonally adjusted at annual rates). While state personal income for the nation as a whole declined more sharply than in Oklahoma during the worst of the recession, it, too, has recovered to just over 99 percent of pre-downturn levels.
April General Revenue collections were announced this afternoon and provided further confirmation that while the fiscal free fall has now stopped, the return to pre-downturn levels is likely to remain long and slow. Overall, April’s collections of $512.3 million were almost exactly the same amount as last year’s collections of $513.4 million. Gross production taxes were up considerably compared to one year ago (+$21.4 million, 65.8 percent), while income taxes remained down (-$32.3 million, -11.5 percent). Read the rest of this entry »
Today’s announcement of the monthly General Revenue collections brought incontestable good news:
State revenue collections in March topped prior year collections for the first time since December 2008 and the official estimate for a second consecutive month, State Treasurer Scott Meacham announced today.
Collections beat the official estimate by an impressive $81.4 million, or 25.5 percent. For the third quarter of FY ’10, collections fell short of the estimate by just 2.4 percent; by comparison, for the second quarter, revenues were more than 27 percent below the estimate.
Compared to the same month in 2009, collections in March were $6.4 million, or 1.6 percent, higher. The chart below, which we have been using in recent months to put this year’s collections in a longer-term perspective, reveals the extent to which March marks a sharp and decisive upturn in revenues. The month’s collections were back to just over 90 percent of the average collection for the same month over the past five years. In each of the previous nine months, collections remained mired below 85 percent of their five-year average. Read the rest of this entry »
The latest state revenue collections announced today provided mixed news:
State revenue collections in February exceeded the official estimate for the first time since December 2008, but fell short of prior year collections for the same month, State Treasurer Scott Meacham announced today.
Preliminary reports show General Revenue Fund collections in February are $220.6 million. That amount is:
- $17.3 million, or 7.3 percent below the prior year; but,
- $0.8 million, or 0.4 percent above the estimate.
February collections were buttressed by $25 million in gross production taxes on oil that were allocated to the General Revenue Fund and by stronger-than-expected income tax collections. After tax refunds, the state took in net income tax collections of $10.7 million in February, whereas the official estimate was for a net loss of $9.1 million in income tax payouts. Read the rest of this entry »
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