Archive for 2012

Quick take: On track for another flat budget year

by | November 14th, 2012 | Posted in Budget, Taxes | Comments (0)

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.

Quick Take: New fiscal year off to mixed start

by | August 16th, 2012 | Posted in Blog, Budget | Comments (0)

This week’s announcement of General Revenue (GR) collections for the first month of the new fiscal year (FY 2013) provided mixed news for both overall collections and the performance of particular major taxes.

  • Overall GR in July was $382.7 million. This is $6.4 million, or 1.7 percent, above last year. However, as the chart below shows, state revenues have yet to fully recover from the collapse that accompanied the last economic downturn. This year’s July collections remain 15 percent below four years ago and are still not back to where they were a full six years ago.

  • Most major taxes showed growth compared to last year, showing continued strength in the state economy. July sales tax collections were up 9 percent from last year and are 6.5 percent above their pre-downturn peak. By contrast, while income tax collections were up 20.7 percent from last year, FY 2013 income tax collections remain 20 percent below their peak in FY 2007. This reflects both the continuing impact of income tax cuts that have phased in over the past eight years and the allocation of an increasing share of income tax collections to the ROADS fund and other purposes.

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Stumbling revenue collections should signal caution

by | April 12th, 2012 | Posted in Blog, Budget | Comments (0)

Over the past two years, Oklahoma’s revenue collections have been on a steady path to recovery. For the first nine months of FY 2012, collections to the General Revenue fund (GR) are up 22 percent compared to the same period two years ago. As the chart below indicates, tax collections have still not fully recovered from their steep drop during the 2008-09 recession. Year-to-date GR remains 7 percent below its pre-recession peak and below the levels of six years ago (without adjusting for inflation or population growth).  Yet through February, monthly GR collections had been up compared to the same month from the prior year for 22 straight months. Total Gross Receipts to the Treasury (GRT), which includes more taxes than the General Revenue fund, was up for 24 consecutive months.

This month, however, there are signs the revenue recovery is stumbling. Last week, Treasurer Ken Miller announced that Gross Receipts to the Treasury fell modestly in March, down 0.3 percent compared to the same month one year ago. The drop was due primarily to gross production taxes, which came in $38.1 million, or 36 percent, below last March. Miller noted that low natural gas prices have now led to four consecutive months of declining gross production revenues and he anticipates continued difficulties:

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Revenue forecast confirms need for caution

by | December 21st, 2011 | Posted in Blog, Budget | Comments (3)

On Tuesday, the Board of Equalization certified a preliminary estimate of the revenues available for next year’s budget. The numbers confirm that while the worst of the fiscal crisis is over, the state is experiencing a slow, incomplete recovery that will fall far short of restoring key services to pre-downturn levels.

The preliminary FY ’13 estimates, developed by the Oklahoma Tax Commission and Office of State Finance, will form the basis for the Governor’s Executive Budget that will be delivered in early February; the Board will meet again in mid-February to provide revised estimates that will be binding on the 2012 Legislature. As we see in the chart below, collections to the General Revenue (GR) fund are expected to continue their recovery next year from their collapse during the recession of 2008-09. Next year’s GR is estimated at $5,540 million, which is 19.9 percent greater than FY ’10.  Yet next year’s revenues are expected to remain 7 percent below their levels of six years ago (FY ’07), even as the cost of providing services rises due to inflation, population growth, and increased caseloads.

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Quick Take: Despite growth, revenues still well below pre-downturn levels

by | November 16th, 2011 | Posted in Blog, Budget | Comments (3)

For the eighteenth consecutive month since May 2010, General Revenue (GR) collections grew compared to the prior year. October GR was $24.3 million, or 6.3 percent, above collections in October 2010. All major taxes brought in more revenue than one year ago.

continue reading Quick Take: Despite growth, revenues still well below pre-downturn levels

Up or down?

by | August 8th, 2011 | Posted in Blog, Budget | Comments (1)

The Office of State Finance today released General Revenue collections for July, the first month of FY ’12. Total collections were $385.0 million, which was $14.9 million, or 4.0 percent above July 2010, and $17.0 million, or 4.6 percent, above the certified estimate for the month. State Finance Director Preston Doerflinger noted:

While there was moderate growth in receipts, collections dipped from the overall double-digit growth rate for FY-2011.

While revenues continue to recover from their sharp decline during the downturn, the recovery remains only partial, as can be seen from this table:

continue reading Up or down?

Revenue collections finish strong year – but still face a steep upward climb

by | July 12th, 2011 | Posted in Blog, Budget | Comments (3)

State Finance Director Preston Doerflinger yesterday announced that June General Revenue (GR) collections came in $78.1 million, or 15.7 percent, above last year and $66.2 million, or 13.0 percent, above the official certified estimate. The June collections brought to an end the 2011 fiscal year and confirmed the increasingly solid recovery of Oklahoma’s tax collections that has been apparent over the course of the year. As can be seen from the first chart, the final quarter of FY ’11 marked the second quarter in a row where revenues exceeded the prior year by over 12 percent and the fifth straight quarter of year-over-year quarterly revenue growth.

For the full year, General Revenue increased by $487.1 million, or 10.5 percent, from the depths of FY ’10. However, as we can see, revenue collections remain substantially below pre-downturn levels. This year’s GR came in 14.2 percent below FY ’08 and remains considerably below collections of five years ago, FY ’06.

continue reading Revenue collections finish strong year – but still face a steep upward climb

Quick Take: Revenues rebounding but still way down from pre-downturn levels

by | June 15th, 2011 | Posted in Blog, Budget | Comments (2)

This week, State Finance Director Preston Doerflinger announced General Revenue (GR) collections for May.  For the month, GR was $36 million, or 9.5 percent, above May 2010 and $25.4 million, or 6.5 percent, above the certified estimate. May collections would have been even higher but for the Legislature’s decision to allocate $21.4 million in oil revenues as supplemental funds for common and higher education. For the eleven months of FY ’11, revenues are $409.1 million, or 9.9 percent, above last year and $153.2 million, or 3.5 percent, above the certified estimate. In this blog post, we go a little deeper into the numbers with a series of brief observations and charts.

  • May marks the 13th straight month that revenues showed improvement compared to the same month for the prior year. In each of the last seven months, revenues have come in at least 9 percent higher than the prior year.

Quick Take on the Economy: Income picks up steam, unemployment edges downward

by | April 19th, 2011 | Posted in Blog, Economy | Comments (2)

The nation continues to show signs that it is emerging from the deep and prolonged economic recession that began in late 2007.  April’s edition of Numbers You Need, our monthly bulletin of key economic and budget trends, paints a mixed but mostly positive picture of economic recovery in Oklahoma. While the state was not the hardest hit during the recession, we saw noticeable spikes in unemployment, foreclosures, and bankruptcies, and increased reliance on social safety nets like food stamps.  Considering Oklahoma came late to the recession, might it also be late in joining the recovery?  That doesn’t appear to be the case.  The most recent data suggest that Oklahoma may be slightly outpacing the nation in two key areas of economic growth: personal income and employment.

Personal income growth in Oklahoma paints an encouraging picture of economic recovery over the last year.   Personal income is reported quarterly and encompasses all of the different kinds of income received by Oklahomans.  When personal income rises, so does the amount citizens have available to spend, save, or invest in the economy.  Tax revenues also increase with personal income, meaning states have more to spend on infrastructure and social services.  Since a large majority of small business income is reported as personal income, it is an excellent overall measure of the health and growth of the state’s economy.

continue reading Quick Take on the Economy: Income picks up steam, unemployment edges downward

Quick Take: March revenue collections

by | April 12th, 2011 | Posted in Blog, Budget | Comments (2)

Yesterday, State Finance Director Preston Doerflinger announced that March General Revenue (GR) collections came in 9.3 percent above March 2010 and 10.5 percent above the certified estimate.  This marked the 11th straight month that GR showed improvement over the prior year. For the 3rd quarter of FY ’11, GR was up just under 14 percent from FY ’10. This marked the strongest year-over-year growth since 2005, the peak of the last economic cycle.

All major tax categories increased in March over the same month a year ago with the exception of the personal income tax. In a press release, the State Finance Directors downplayed the importance of this drop:

continue reading Quick Take: March revenue collections

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