OKPOLICY.ORG
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.
Still, the revenue numbers provide far from unambiguous signs that the state’s fiscal situation has turned a corner. Not only were February’s collections 7.3 percent below those of a year ago, they were only 76.1 percent of the average collections for the same month over the five prior years. By this measure, February actually stands as the worst month of the entire downturn, as shown in the table above. On the other hand, a good part of this month’s poor performance compared to prior years was in the “other sources” revenue category, which includes investment earnings and miscellaneous taxes, fees, and charges. General Revenue from “other sources” was a full $23.8 million below the month’s estimate for February and $17.9 million below last year. It’s unclear at this point what accounts for the weakness in this revenue category, but it may relate more to a quirk in the timing of collections and transfers than actual economic conditions. Had “other sources” come in at the estimate, February 2010 revenues would have reached 84 percent of the five-year average and provided much clearer evidence of a genuine upswing.
As an indicator of how severe this revenue downturn has been and how long and difficult the recovery is likely to be, this year’s February collections are 30 percent below their peak of four years ago — and lower than any year since at least FY 2001.
Finally, while it is not fully clear whether revenue collections are now recovering, the fact that February’s collections hit the estimate does mean that this year’s General Revenue shortfall may not end up quite as enormous as previously assumed. The shortfall, which was projected by the Board of Equalization last month to reach $940 million by year’s end, now stands at $863 million, basically unchanged from a month ago. Should the final four months of the fiscal year look like this month, it might actually allow the state to enter the next fiscal year with a small amount of cash left in the bank.
