OKLAHOMA CITY – Total collections to the state’s General Revenue Fund slowed in August, but sales tax growth remained a silver lining for the Oklahoma economy, Secretary of Finance Preston L. Doerflinger said Wednesday.
"Our overall collections have been diminished by low energy prices in the final months of the last fiscal year, plus refunds made during the first two months of Fiscal Year 2013," Doerflinger said. "And the drought undoubtedly has had some negative effect. But those factors haven’t dampened consumer confidence."
The finance secretary, in releasing his monthly General Revenue Fund report, added: "We’ve also seen lower than expected personal income tax collections, but part of that is related to the timing of the remittance of withholding taxes. This has been overcome largely by sales taxes, which beat prior year collections by double digits over the first two months this fiscal year."
Total collections to the General Revenue Fund for the month of August were $386.4 million, down $28.4 million and 6.8 percent from a year ago. The amount collected for the month was $17 million and 4.2 percent lower than the estimate.
It was only the third time since April, 2010, that monthly GRF collections had been below both prior year receipts and the estimate.
Doerflinger said it is important to note that despite the lull in personal income and oil and natural gas tax receipts, total GRF collections for July and August were still above the estimate by 0.4 percent. Sales tax collections, however, beat the estimate by 4.1 percent in July and by 6.3 percent in August. Sales tax receipts in August also exceeded the prior year by 12.1 percent.
"It’s too early to proclaim a slowdown in the Oklahoma economy, which has had an incredible rebound from the recession over the past two years" he said. "After all, sales tax growth is perhaps the leading indicator of our economic strength, our corporate taxes are up and our 4.9 percent unemployment rate is the envy of neighboring states.
"Gov. Mary Fallin has gained national attention for her job recruiting efforts and for her pro-growth policies that have helped the Oklahoma economy recover. Our constitutional Rainy Day Fund now has a near-record $577 million in it after being completely drained as a result of the recession. In short, the Oklahoma economy appears to have a lot of power and vitality moving forward."
Doerflinger said his only real worry at this point stems from external factors such as financial troubles abroad and the failure of the president and Congress to reach an agreement on the federal budget.
"I hope another national financial calamity does not happen," he said, "but it’s critical to be prepared just in case. I applaud Speaker-designate T. W. Shannon’s plan for a legislative study to develop contingency plans in the event Washington doesn’t gets its act together and that leads to massive cuts in federal funds going to the states.
"At the Office of Management and Enterprise Services, we have requested agencies to notify us as we go through the budget request process of any known impact from the sequestration provision of the federal Budget Control Act. That will give us a sense of which programs will be subject to cuts if the federal budget issues are not resolved and automatic reductions are triggered."
Governor Fallin said, "The latest revenue report paints the picture of an Oklahoma economy that is fundamentally sound. While some collections have slowed, overall revenues in this Fiscal Year continue to be above initial estimates and sales tax revenues continue to grow at a strong clip. Furthermore, other economic indicators – like the state’s 4.9% unemployment rate – remain strong.
"Our recent economic success, however, won’t continue unless we continue our laser-like focus on pro-growth reforms. For Oklahoma to continue its forward momentum we will need to continue to pursue job creating policies here on a state level."
The Governor added that "Oklahoma will continue to be affected by national and international forces that remain outside of our control. Global energy prices, uncertainty surrounding policies from Washington, and the potential for massive military spending cuts under ‘sequestration’ all have the potential to dramatically impact our economy and our revenue collections. As governor, I will continue to advocate for those policies that support Oklahoma job creation and economic growth."
General Revenue collections for the first two months of the new fiscal year were $775.5 million, down $22 million or 2.8 percent from the same two months of FY-2012 but remained $3 million or 0.4 percent above the estimate.
Major tax categories in August contributed the following amounts to the General Revenue Fund:
Income taxes – The total collected from individual and corporate income taxes in the month of August was $143.9 million for the FY-2013 General Revenue Fund, which was $17.7 million or 11 percent less than prior year collections and $5.7 million or 3.8 percent below the estimate.
Individual income tax receipts of $139.9 million were $21.7 million and 13.4 percent below the prior year and $7.3 million or 5 percent below the estimate.
Corporate tax collections were up for the month, contributing $3.9 million to the General Revenue Fund for the month, which was $3.9 million or 100 percent above August 2012 collections and $1.6 million or 69.8 percent above the estimate.
Sales tax -- Sales tax collections in August produced $162.8 million for the General Revenue Fund, which was $17.6 million or 12.1 percent more than the prior year and $9.6 million or 6.3 percent above the estimate.
Gross production tax –Gross production tax collections from natural gas brought in $154,439 and oil collections made no contribution to the General Revenue Fund. Refunds and other required distributions absorbed most of the $14 million in gross collections from natural gas; and, as required by statute, the first Gross Production Oil Tax collections were distributed to specified funds – primarily for education.
Motor vehicle taxes -- This tax source produced $19.6 million from August collections, which was $353,000 or 1.8 percent below the prior year and $150,000 or 0.8 percent below the estimate.
Other Revenue -- Other revenue produced $60 million in August. This amount was $8.1 million or 15.6 percent above the prior year and $3.6 million or 6.4 percent above the estimate.
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