Yesterday’s announcement of General Revenue (GR) collections for October shows that the state is on track to bring in about the same amount as in FY 2012.
- Overall GR in October was $439 million. This is $30.9 million, or 7.6 percent, above the same month last year. However, as the chart below shows, cumulative state revenues remain very close to the previous year (FY 2012). The stronger collections in October allowed revenues to catch up from a $28.3 million drop in August. Revenue collections are about halfway between those in the depths of the recession (FY 2010-11) and the pre-recession peak (FY 2008-09).
- Most major taxes show growth compared to last year, with the notable exception of gross production taxes on oil and gas drilling. Cumulative net income tax collections are up by 11.7 percent from the previous year. (Personal income tax collections are up by 5.6 percent, and corporate income tax collections, which tend to show large, unpredictable fluctuations based on when corporations choose to report their earnings, are up by 73.5 percent.) The sales tax is up by 8.3 percent from FY 2012, and motor vehicle taxes are up by 7.3 percent. In contrast, gross production taxes going to general revenue have plummeted by 94.9 percent compared to the previous year. We are likely seeing the effect of low natural gas prices, the payback of deferred tax credits to oil and gas drillers, as well as ballooning tax exemptions for horizontal drilling.
In a press release announcing the new revenue numbers, Secretary of Finance Preston Doerflinger said that ”Our economy is still on a roll, but I’m concerned about national events. The stock market reacted negatively last week after the election as the so-called fiscal cliff moved to the forefront of the national debate amid pessimism over whether the president and Congress can reach a suitable budget consensus in the weeks ahead.” With collections remaining nearly flat from the previous year, growing obligations such as the $100 million plan to improve Oklahoma’s child welfare system, and an uncertain national environment, policymakers should proceed cautiously in coming months.