State Treasurer Randy McDaniel’s most recent “Gross Receipts to the Treasury” report that came out last week is interesting because it contains the annualized state revenue numbers for Fiscal Year 2022, which ended June 30. Although state agencies won’t know how much funding might be available for appropriation until the state Board of Equalization meets in December, they can at least begin to plan their budgets by looking at the state’s gross receipts from last year. Proposed agency budgets must be filed with the state Office of Management and Enterprise Services (OMES) by October 1. Also, absent some major dislocation in the economy, McDaniel’s end-of-year numbers give legislators a clue as to what they might be working with when they begin to write the state budget next session.
This past fiscal year was a very good year for the Oklahoma economy. Combined gross receipts for FY 22 show a total gross revenue increase of a whopping $2.14 billion, or 15 percent, above collections from FY 21, broken down as follows:
- Gross income taxes increased by $459.2 million, or 8.6 percent. (Individual income tax collections were up by $351.6 million, or 7.9 percent. Corporate collections increased by $107.6 million, or 12.2 percent.)
- Combined sales and use taxes generated an increase of $775.3 million, or 13.3 percent. (Gross sales tax receipts were up by $645.2 million, or 13 percent. Use tax collections generated an increase of $130.1 million, or 15.2 percent.)
- Oil and gas gross production tax collections were up by $775.7 million, or 102.8 percent.
- Motor vehicle collections increased by $54.9 million, or 6.7 percent.
- Other sources generated an additional $79 million, up 4.9 percent. (Medical marijuana taxes were down by $5.9 million, or 8.9 percent.
There are two things to note about these numbers. First, according to Treasurer McDaniel, “the General Revenue Fund, the state’s main operating account, receives less than half of the state’s gross receipts with the remainder apportioned to other state funds, remitted to cities and counties, and paid in rebates and refunds.” So even if the economy remains as hot as it was last year, less than half the $2.4 billion increase could be expected to be available for increases in appropriations.
Second, also according to McDaniel, “Oklahoma’s macro economy is benefitting from current energy prices and low unemployment.” McDaniel reported that oil averaged $101.78 per barrel and natural gas averaged $6.60 per million BTU in FY 22. It’s doubtful that would be expected to continue. And anyone who reads the news is aware the economy is expected to slow in response to actions to curb inflation. The equalization board will be considering these factors when making its certification.
Having said that, even with the appropriate cautionary note about the economy, those who provide public services such as education, public safety, health, mental health and social services, and general government services should be able to look forward to a positive session unless the Legislature caves to Gov. Stitt’s call for large tax cuts.