Strong Income Tax Receipts, September Collections Resume Rise

OKLAHOMA CITY – Revenue collections ticked up in September, pushed by strong income tax remittances, State Treasurer Ken Miller announced this week as he released the monthly gross receipts to the treasury report.

Total collections were almost three percent higher than in September of last year. Three of the four major tax categories were positive, with income tax leading the way up almost 16 percent. Sales tax and motor vehicle receipts also showed growth.

Collections from the gross production tax on oil and natural gas remained well below prior year totals, down almost 40 percent, but off their low of 54 percent below the prior year in August, indicating we may have turned a corner, Miller said.

“Oklahoma’s economy continues to climb up the expansion side of the business cycle in spite of low prices for natural gas,” Miller said. “After two years of sharp growth in revenues, collections have leveled off over the past half year as we close in our all time high from December 2008.”

The positive turn on gross receipts comes after collections dropped below the prior year during three of the past seven months, including August. However, oil and natural gas production collections have been consistently lower than the prior year for 10 months.

“Sales tax collections, generally viewed as a measure of consumer confidence, are up almost six percent in September,” Miller said. “This is obviously a good sign, even though sales tax has been growing by double digits for much of the past year.”

FY13 General Revenue Collections 0.4% above estimates

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:

Record Rainy Day Fund Deposit Announced

OKLAHOMA CITY – Sales tax revenue climbed by 13.1 percent in June over the previous year as Oklahoma closed out Fiscal Year 2012 collections to the General Revenue Fund with enough money to make a record $306.8 million deposit into the state's Rainy Day Fund, Secretary of Finance Preston Doerflinger announced Tuesday.

"This preliminary report drives home the role consumer confidence has played in Oklahoma's economic recovery in the fiscal year ending June 30," Doerflinger said. "For the year, sales tax collections rose by 9.7 percent over the prior year. In June and at other times during the year, strong sales taxes helped ease energy tax variances due to low prices and tax rebates."

Tuesday’s report shows FY-2012 collections to the General Revenue Fund totaled $5.543 billion. This amount was $405.3 million and 7.9 percent above collections for FY-2011 and $306.8 million, or 5.9 percent above the estimate for FY-2012.

"It's stunning to realize that the Rainy Day Fund contained only $2.02 when Gov. Mary Fallin took office less than two years ago." Doerflinger said. "With this deposit added to last year's $249 million deposit, we now have $556 million in our savings account and have moved within striking distance of the all-time record of $596.6 million reached before the recession."

Gov. Fallin said, "It's great to end the 2012 fiscal year on a high note, as the entire year was a boon for the Oklahoma economy as collections exceeded the previous year by nearly 10 percent. Since January 2011, we've had positive growth over the prior year in 16 out of 18 months, and we've had double-digit growth in 10 months. We’ve also had a net increase of 38,200 jobs in the past 12 months ranking our state second in the nation for job creation. Our pro-business policies are succeeding in growing the economy and providing more opportunities for Oklahoma families.

"Looking ahead to next year, it's important we continue our focus on policies such as workforce development and education reform, government modernization, as well as tax reform that will help us bring even more jobs and investment to the state."

Doerflinger said he is hopeful that energy prices will improve during the new fiscal year, "understanding the impact of the oil patch on the Oklahoma economy. But our recovery has been broad-based, as high-lighted by the Oklahoma Department of Commerce's recent Economic Snapshot.

"That report, among other things, pointed to Oklahoma gaining more than 38,000 jobs since the first of the year, ranking second among the states. We lost a few hundred manufacturing jobs in May, but kept our No. 1 ranking in that area with a growth rate of 6.6 percent.

"I also found it interesting that our unemployment rate dropped to 4.8 percent in May at the same time the number of Oklahomans seeking jobs increased. Other states with low jobless rates have seen their workforce numbers shrink."

Oklahoma's unemployment rate is the fifth lowest in the country and compares to the national rate of 8.2 percent.

June Revenue Collections Fall Below Prior Year

OKLAHOMA CITY – Oklahoma finished the fiscal year well into the black, but the last month saw the largest decline of the year in gross production tax collections, State Treasurer Ken Miller announced today as he released the gross receipts report for June and fiscal year 2012.


Total collections in June were pushed negative compared to the same month of the prior year due to a 42 percent drop in gross production collections. It was also the seventh consecutive monthly decline in gross production tax collections from the same month of the last year. June marked only the second month in the fiscal year where total collections dipped below the prior year.

“Reductions in gross production and personal income tax collections combine to set our monthly number back, but other economic indicators, such as sales receipts, low unemployment and solid corporate profits, point to continued expansion,” Miller said.


June collections are down by 0.6 percent from June of last year, Miller said. That compares to average growth during FY 2012 of 7.7 percent, including a 10.3 percent increase in income tax collections.


Natural gas prices and timing

Total Collections Grow in May as Gross Production Continues Slide

OKLAHOMA CITY – Even though natural gas and crude oil prices are lower than expected, Oklahoma’s total revenue collections continue to rise, driven primarily by income and sales, State Treasurer Ken Miller said today as he released the monthly gross receipts report for May.

Ken Miller

“With incomes climbing and sales tax collections on the rise, Oklahomans continue to show confidence in the economy in spite of renewed global uncertainty and a pullback in U.S. job growth,” Miller said.

May collections are up by 5.8 percent from May of last year, Miller said. That compares to average growth over the past 12 months of 9.2 percent.

Watching natural gas and oil prices

Fallin, House, Senate Leaders Unveil Tax Cut, Tax Simplification Plan

OKLAHOMA CITY -- Governor Mary Fallin and leaders in both the House and Senate today introduced a joint plan for income tax cuts and tax code simplification. The proposal lowers the top income tax rate from 5.25 percent to 4.8 percent in Fiscal Year 2013 and includes a one-time additional tax cut tied to a revenue growth trigger in FY 2015. If state revenue grows by at least 5 percent in that year, the income tax rate would be reduced further to 4.5 percent.

The joint proposal represents a tax cut of over $218 million to Oklahomans when fully implemented in FY 2014, and would cut taxes by an additional $121.4 million in FY 2015 should the growth trigger be reached. Lost revenue is partially offset by tax reforms totaling $117 million when fully implemented in FY 2014. These reforms include the elimination of 33 tax credits, the elimination of certain deductions and the elimination of the personal exemption for single filers making over $35,000 and joint filers making over $70,000 (see attached one pager for new details).     

The new plan also simplifies the tax code by dropping the total number of tax brackets from seven to three. New rates will be set at 1 percent, 3.3 percent and 4.8 percent.

“This proposal represents a significant income tax cut and an important step forward for Oklahoma,” Fallin said. “Our plan is a responsible proposal that will go hand in hand with a budget that protects and supports all core functions of government. It also delivers a substantial tax cut that will allow Oklahomans to keep more of their hard-earned money while improving the environment for job recruitment and job retention in the state. I applaud both House and Senate leaders for coming together on this issue and giving the people of Oklahoma some well-deserved tax relief.”

House Speaker Kris Steele also spoke in support of the plan.

“Collections through April of this year are now $350 million higher than originally expected,” said Steele. “Oklahoma is growing. We have a choice to either spend all that money on more government, or give it back to the hardworking people of Oklahoma. We choose the latter. An income tax cut is not only the smart thing to do for Oklahoma’s economy, it’s the right thing to do for our citizens.”

Senate Pro Tem Brian Bingman said the tax cut would help small business owners while protecting core government services. 

“Today’s tentative agreement gives the people of Oklahoma a real and meaningful tax cut,” said Bingman.  “Senate Republicans have always believed lowering the tax burden is an important part of creating jobs and economic freedom in Oklahoma.  And today, we’ve taken an important step forward that shows the people of Oklahoma they can count on us to keep our word.  This plan will help more of our private sector citizens and small business owners be the innovators, entrepreneurs, and drivers of our state economy—all while protecting important core government services like teaching in the classroom.”

Two-year Revenue Growth Streak Ends as Collections Fall

OKLAHOMA CITY – Oklahoma’s two-year revenue growth streak has come to an end as total revenue collections in March fell slightly lower than collections from the same month last year, State Treasurer Ken Miller said last week as he released the March gross receipts report.

Total collections for the month were $920.6 million, down by about $2.6 million or 0.3 percent from March of last year. Miller said the biggest drop among the major sources of revenue came from the gross production tax, which fell by more than one-third.

Income tax collections were lower for the first time in eight months with negative corporate income tax collections weighing down the slightly positive personal income tax receipts.

Sales tax receipts are the only major revenue source that outperformed the previous year with collections surging 15 percent compared to March 2011.

Watching the energy sector

“In the coming months, we will closely watch the energy sector as it is a leading sector of Oklahoma’s economy,” Miller said.

Gross production collections were down in March for a fourth consecutive month, reflecting the impact of low natural gas prices. On Monday, the spot price of natural gas closed at its lowest point for the year, below $1.90 per thousand cubic feet (mcf), at the Henry Hub in Louisiana, the primary marketplace for Oklahoma-produced natural gas.

“While one month does not a trend make in overall revenue collections, four continuous months of decreasing gross production collections is getting trendy,” Miller said. “And due to the timing of gross production collections, March receipts reflect market activity from January. We should expect a period of shrinking natural gas tax collections until prices rebound, especially if the price triggers a lower extraction tax rate.”

Miller said state financial authorities will keep a close eye on natural gas prices.

“Next year’s official revenue estimate reflects natural gas at $3.64 per mcf,” he said. “In addition, state law mandates the currently assessed tax rate of seven percent be lowered to four percent if the average monthly price falls below $2.10 per mcf.”

Miller said the energy sector, which helped bolster Oklahoma’s recovery from the national recession, is tied to approximately one-third of the state’s economic activity.

“Undoubtedly, the strong price of crude oil is helping to compensate for the downturn in natural gas prices,” he said.

The exact percentage of gross production revenue generated by natural gas in March is not yet calculated, but the trend over the past several months has been downward. In October, it was 51 percent. In February, it was 35 percent.

Some positive news

School Officials Lying about Impact of Senior Property Tax Freeze, Dank Says

OKLAHOMA CITY (March 22, 2012) – Claims by school lobbyists that a freeze on property taxes paid by senior citizens would cut school funding are simply false, the legislator who sponsored the measure said today.

“We ought to expect more from those who speak for our schools than outright falsehoods,” said state Rep. David Dank (R-Oklahoma City), whose House Joint Resolution 1001 would have allowed the people to vote to freeze property taxes owed by seniors at current levels for as long as they own their homes.

“The head of the state school board association actually alleged on Tuesday that this would cut school funding,” Dank said. “That is simply a lie. This measure would not cut one penny from any school or county budget anywhere in the state. All it would do would be to give Oklahoma’s 600,000 seniors assurance that their property taxes would not increase while they struggle to remain solvent and in their homes.”

HJR1001 was amended in the Senate committee to simply raise the current income level that already qualifies some seniors for a property tax freeze. That action came after school lobbyists claimed that the full freeze for all seniors would cut their budgets, even though it was evident that no actual reductions were involved.

“This is in no way, shape or form a tax cut,” Dank said of the measure. “It is bogus to claim that it is. The people who claim to speak for schools ought to have more regard for the truth.”

Dank said the property tax freeze for seniors was promoted by pleas from many seniors who are hard-pressed to live on fixed incomes with steadily rising utility, fuel and prescription bills, while also facing annual property tax increases. In some cases, he said, seniors facing medical costs or the need to place a spouse in a nursing home may be forced to sell their homes because of larger yearly property tax bills.

“You could give the school bureaucrats all the money in the world and they’d still want more,” he said. “We have a grossly inefficient public school system with far too many small districts. We have also seen superintendents get big pay raises even in the worst of the recession and now we are hearing them complain about a tax cut that isn’t a tax cut at all.”

Dank said he was especially concerned by statements by the head of the Oklahoma State School Boards Association, who was quoted as saying that the measure as originally written would cause an “erosion of the tax base” and result in “another reduction in funding for schools.”

“Aren’t the schools he claims to represent teaching basic arithmetic?” Dank asked. “One hundred percent is still 100 percent, even when it does not become 105 percent. This resolution was written specifically to hold schools and counties harmless. They would still receive the same amount each year in ad valorem revenues, plus any increases from higher valuations of property that are owned by those under 65.”

Dank said Oklahoma can remain an attractive location for retirees by being fair to seniors, or it can drive them out with excessive taxes.

“Every senior who is forced out of his or her home by more and more bills from the taxman represents a dead loss to Oklahoma,” he said. “Doesn’t it make more sense to help them remain independent and in their homes as productive seniors than to drive them into nursing homes or assisted living centers because they can no longer afford the tax bill?”

Dank praised state Sens. Steve Russell and Greg Treat for their defense of the measure in the Finance Committee, and urged senators to reconsider restoring the full senior freeze before they vote on it on the floor.

“Someone needs to tell the tax hogs that enough is enough, and that you cannot hound people literally into the grave without a reaction,” Dank said.

Lawmakers outline $853 million in unnecessary government spending

OKLAHOMA CITY – Over $853 million in unnecessary state government spending of taxpayer dollars was outlined today by a group of lawmakers who want to use the savings to make Oklahoma a no-income-tax state.

The group is advancing a proposal to phase out Oklahoma’s personal income tax over 10 years.

“We believe Oklahoma should be the state where people keep more of the fruits of their labor than anywhere else,” said state Rep. Leslie Osborn, R-Mustang. “This will make us a magnet for job creators and set us on a path of vibrant economic growth and long-term prosperity.”

The group’s proposal aims to achieve full phase-out of the tax without raising other tax rates, negatively affecting core state government services, or harming retirees, senior citizens or veterans.

To do so, the lawmakers say their proposal requires a total of $525 million in total reductions in state government outlays that must be found over a two-year period. Because the savings can be found over two years instead of just one, annual savings found for Fiscal Year 2013 could also be counted again in Fiscal Year 2014 toward the total savings necessary.

In offering a list of $853 million in total savings options over the next two budget years, the lawmakers maintain there is plenty of room to reduce wasteful, unnecessary state spending while avoiding cutting core services, and still put Oklahoma on track to become the tenth state in the nation without a personal income tax.

“We can make these reductions and not touch one dollar of actual core spending in education, transportation, public safety, or the safety net for the truly needy,” said state Rep. David Brumbaugh, R-Broken Arrow. “In return, we can repeal our state’s income tax in a responsible amount of time and see an influx of new jobs and investment in Oklahoma at levels we’ve not seen before.”

The list of $853 million over two years includes savings from three areas: wasteful, inefficient or unnecessary state expenditures; corporate tax credits that have not exhibited a high enough return on taxpayer investment; and modernization, consolidation and technology reforms within state government bureaucracy that are still in the process of being implemented.

“Some of our colleagues may feel uneasy about eliminating taxpayer subsidies for things like golf courses or rodeos that may be in their home district,” said state Rep. Tom Newell, R-Seminole. “Or they may think it’s inconvenient to make state agencies operate efficiently. But our constituents sent us to the Capitol to use common sense and fix what needs fixing. And they don’t deserve for their hard-earned tax dollars to be spent wastefully.”

Newell said the goal in releasing the list was to compile credible savings ideas from several sources. Working from this list, the lawmakers hope to encourage their colleagues to build a consensus around which areas of nonessential state spending could be trimmed over the next two years.

One source lawmakers credited was the work in recent months by state Rep. David Dank, chair of the House Appropriations & Budget Subcommittee on Revenue & Taxation, and state Sen. Mike Mazzei, chair of the Senate Finance Committee, to bring attention to ineffective corporate tax credits.

Another acknowledged source was a recently released list of state budget reduction ideas from the Oklahoma Council of Public Affairs (OCPA), a free-market think tank.

State Rep. Charles Ortega said he and his colleagues, when examining the savings recommendations from these and other sources, adopted some and left others for another day.

“The goal here is to put together good ideas from several different places and start reaching a consensus on what’s possible, both politically and practically, in order to find enough savings to phase out our income tax,” said Ortega, R-Altus. “We have great respect for the ideas put forward in recent weeks and months by Chairman Dank, Chairman Mazzei, groups like OCPA and others. Some of these ideas have legs right now, and some may not. We believe repealing Oklahoma’s income tax is essential for our state, so we’re asking our colleagues to work with us to determine where we can reduce unnecessary taxpayer expenditures in order to make it happen.”

Click here to see a list of suggested cuts

House Republicans outline tax credit reforms

OKLAHOMA CITY – Oklahoma’s tax credit system would undergo widespread reforms under a plan outlined by House Republican leaders last week.

“A tax credit should benefit taxpayers more than it costs them. Period. That hasn’t been the case in Oklahoma, but under this plan, it would always be the case,” said Rep. David Dank, R-Oklahoman City, chairman of the joint legislative Task Force for the Study of Tax Credits and Economic Incentives.

Dank said meaningful tax credit reform is an important first step for the Legislature to take as it considers reducing and phasing out the state’s personal income tax.

“We need to remember that we cannot accomplish real tax relief for all Oklahomans until we put an end to the costly sweetheart deals that have been handed to a very few in the past. Those giveaways cost us hundreds of millions of dollars each year. Ending tax credit abuse is one vital ingredient in assuring lasting tax relief for all,” Dank said.

The strategy outlined today would save between $250 and $300 million in fiscal year 2013 and continue saving millions of dollars annually in the future. It proposes:

• Extending the current moratorium on all tax credits another two years;
• Enacting a constitutional amendment establishing specific criteria for tax credits;
• Ending transferability of tax credits; and
• Requiring all future tax credits and all credits placed on moratorium to meet the constitutionally-required criteria and receive legislative approval in order to be enacted or removed from moratorium.

“Oklahoma’s tax credit system today is a big block of Swiss cheese with no rhyme or reason whatsoever to all its holes and cutouts. It’s time to wipe the slate clean and start over,” said House Speaker Kris Steele, R-Shawnee. “This policy is as pro-growth and fiscally conservative as it gets. It’s the right thing to do for taxpayers and will result in a better tax credit system that leads to economic growth without wasting taxpayer dollars.”

If all the reforms are enacted, all tax credits placed on moratorium would have to be brought back one-by-one by affirmative votes of the Legislature under criteria that would be in the state Constitution. Future credits would also require legislative approval and would have to meet the constitutionally-required criteria.

Steele plans to seek a constitutional amendment that would place the tax credit criteria adopted by the task force in the Oklahoma Constitution. House Joint Resolution 1089, by Steele, would send the criteria to a vote of the people in November. If approved, the criteria would be placed in the Constitution.

Under the criteria:

• All credits would require pre-approval by the Legislature;
• No tax credit would be transferable;
• All tax credits would be subject to full transparency and regular auditing by the State Auditor;
• Any proposed tax credit would have to be accompanied by a fiscal impact statement detailing how it would affect the state budget;
• All tax credits would be subject to caps and specific termination dates;
• No tax credit could be enacted within the final five days of any legislative session.

“It protects taxpayer dollars – plain and simple – and ensures all tax credits actually benefit the state,” Steele said. “But get ready, because as soon as we speak a word of this proposal, special interest groups are going to start lobbying tooth and nail in defense of their credits. Our message to them is simple: If the credit meets the criteria, the credit is useful and can stay, but if it fails the criteria, it’ll have to go.”

House Bill 2978, by Dank, would statutorily enact the criteria.

House Bill 2976, by Dank, would extend the tax credit moratorium that has been in place since 2010 for another two years. The extended moratorium only applies to tax credits. It does not apply to tax incentives such as the Quality Jobs program and certain engineering and oil and gas incentives that Dank said have adequate safeguards and produce net economic gains that exceed the cost of the incentives.

“An extended moratorium gives the Legislature additional time to consider the worthiness of each individual tax credit and to put in place specific criteria the task force believes must apply to all tax credits, be they existing or future proposals,” Dank said.

HB 2979, by Dank, would end transferability of tax credits.

“Transferable credits are bought and sold like poker chips by folks who’ve provided zero services to the state. This practice was identified by the task force as perhaps the most constitutionally questionable aspect of the entire system. It must end,” Dank said.

House Bill 2977, by Dank, would extend the Task Force for the Study of Tax Credits and Economic Incentives for another year, until January 2013.

“It benefits us to have the task force continue the analysis it started last year and serve as a watchdog as this reform process plays out over the next few years,” Dank said.

Rep. Earl Sears, the House Appropriations and Budget Committee chairman, said the reforms will have a direct benefit on the FY 13 state budget and future budgets.

“We’re talking about hundreds of millions of dollars here that we can use to fund core services or return to taxpayers. It’s a significant opportunity for us,” said Sears, R-Bartlesville. “I’ve been honored to be part of the task force and believe Chairman Dank’s leadership has been outstanding. This is what good, honest government is all about.”

NOTE: For accompanying video, go to http://www.okhouse.tv/iViewVideo.aspx?VideoID=403

Lamb Issues Broad Policy Report on Eve of Session

OKLAHOMA CITY - Lt. Governor Todd Lamb published his 2012 Policy and Issues Report last week. The report contains ideas, advice and suggestions from Oklahomans from every corner of the state. 

In the year since Lamb took office he has visited all 77 counties asking one important question, “What impedes your opportunity for growth?”

Attendees of Lamb’s town hall meetings have included people from all walks of life according to the report. The report is a distillation of what Lamb has heard from those who have attended his meetings. 

The report has been presented to Governor Mary Fallin and legislative leaders before the 2012 legislative session begins. 

The report is divided into two parts. The first is Lamb’s vision for the future of the state. The second contains the many ideas gleaned from his conversations while traveling the state. 

The income tax, education, water and the creation of jobs are among the several topics covered in the report. 

Lamb says the report is intended to spark “further debate and discussion” by legislators as they look for ways to make Oklahoma more competitive economically. 

“Oklahoma is the best state in the nation,” Lamb said. “It’s time we compete with other state in something besides football.”

An online copy of the report can be obtained on the Lt. Governor’s website. 

Revenue Collections End Fiscal Year on High Note

OKLAHOMA CITY – General Revenue Fund collections hit a high note to end 2011, recording double-digit growth in December and for the first 6 months of the current fiscal year, Office of State Finance Director Preston Doerflinger announced Tuesday.

"We had the best two months of the 2012 fiscal year in November and December, putting an exclamation point on our recovery from the Great Recession," Doerflinger said as he released the OSF's monthly General Revenue Fund report.

In December, total collections grew by 19.3 percent over the same month a year ago, while beating the official estimate by 16.6 percent.

That came on the heels of November's report showing growth of 22.6 percent and 18 percent, respectively, for that month over November of the prior year and the estimate.

"As we look toward the second half of the fiscal year, it is unrealistic to expect that such dramatic increases in receipts will continue on a month-to-month basis," said Doerflinger, secretary of finance in Gov. Mary Fallin's cabinet. "But all signs point to our economy continuing to outperform other states in our region and the nation as a whole."

"A big reason for this," he continued, "has been the mini-boom in the oilfields, which has generated economic activity throughout our economy and contributed to our growing manufacturing base.

Oklahoma Economy Celebrating 22 Consecutive Months of Growth

OKLAHOMA CITY – Oklahoma’s economy quickened the pace of its recovery during 2011, State Treasurer Ken Miller said yesterday as he released the state’s monthly gross receipts report.

“December was 11.1 percent better than the prior year, the fourth quarter was 10.5 percent ahead of the final three months of 2010, and total year collections surpassed the previous year by 9.6 percent,” Miller said. “We saw healthy growth each month ranging from four to 16 percent with an average at the double-digit mark.”

Miller said December was the fifth time in the past eight months that collections rose by more than 10 percent over the prior year and marked the 22nd consecutive month of growth.

“Twelve-month collections now stand more than $1.3 billion higher than in February of 2010. Since we hit the trough almost two years ago, more than 68 percent of the revenue lost from our peak in December 2008 has been recovered,” he said.

Miller said sales tax collections indicate a happy holiday shopping season in Oklahoma. December collections, reflecting sales between mid-November and mid-December, were $20.42 million or 6.3 percent higher than the last Christmas shopping season.

Looking forward

National and state-specific forecasts point toward continued economic improvement.

Recent Bureau of Labor Statistics data list Oklahoma with year-over-year employment growth of three percent, surpassing all surrounding states. The closest competitor was Texas with growth of 2.2 percent.

A U.S. Chamber of Commerce report shows Oklahoma with the nation’s fourth lowest unemployment rate, adding jobs 3.5 times faster than the national rate in 2011.

During the past 12 months, figures from the Oklahoma Employment Security Commission and Bureau of Labor Statistics show the number of jobs grew by almost 16,500, while the labor force grew by just more than 3,000. During that time, the unemployment rate dropped from 6.9 percent to 6.1 percent.

Nationally, The Conference Board reports consumer confidence grew in December from the month before and now stands at levels not seen since April. Closer to home, the Creighton University Economic Forecasting Group anticipates Oklahoma in 2012 will have the second highest growth in gross state product in the nine-state Mid-America region at 4.6 percent. North Dakota is forecast to grow at 6.8 percent.

December collections

Senate Tax Review Complete, Report Issued

OKLAHOMA CITY –The task force charged with recommending reforms in Oklahoma’s tax system has completed its work. Copies of the report were given to Gov. Mary Fallin, President Pro Tempore Brian Bingman and Speaker Kris Steele on Friday.


Senator Mike Mazzei served as Co-chair of the task force. He told the governor and legislative leaders that as they and members of the Legislature consider the panel’s proposals, it was his hope that the taxpayers of Oklahoma would be the main priority throughout the process.

“The non-partisan Tax Foundation has rated Oklahoma’s overall tax structure 30th in the nation when rating our job creation environment,” said Mazzei, R-Tulsa. “We must transform the tax code; it is simply wrong when a special interest group benefits from an obsolete or ineffective tax preference at the expense of hardworking Oklahomans who deserve to keep more of their hard-earned income.”


The report includes recommendations on reforms which will enable reductions in the top income tax rate from 5.25 to 4.75 percent over a two-year period as well as reducing corporate income taxes from 6 to 5 percent. Additional recommendations would offset those reductions through the elimination of select tax credits and a thorough review of existing tax preferences with an expectation of reduction or elimination of a number of tax credits.

Sen. Rick Brinkley, R-Owasso, served as Vice-chair of the task force.


“These reforms are aimed at simplifying tax law and reducing rates for individuals and businesses,” Brinkley said. “The overall goal is to grow our economy while continuing to make crucial investments in core government services such as education, transportation and public safety,” Brinkley said.


The final recommendation of the task force stresses that other important reforms must be examined should the Legislature consider making Oklahoma a no income tax state.


Throughout the interim, the task force heard from a variety of speakers, including representatives from the Oklahoma Council of Public Affairs, the Oklahoma Policy Institute, the National Conference of State Legislatures, state and local chambers of commerce, economists, specialists in tax and business law and the National Federation of Independent Business.


“I want to thank the members of the task force and all those who participated for their hard work throughout this process,” Mazzei said. “This report is a blueprint that will benefit Oklahomans while attracting the jobs and businesses that will result in the kind of economic development necessary to boost per capita income and quality of life throughout our state.”

Standstill Budgets Likely Next Fiscal Year

OKLAHOMA CITY – The Oklahoma Board of Equalization this week certified approximately $6.5 billion in revenue for the state budget in fiscal year 2013, an increase of $120.3 million over the previous year.

The improvement from last year is a result of increased tax revenues as Oklahoma’s economy continues to improve. 

However, the state faces an estimated budget shortfall of as much as $150 million due to the loss of one time funding sources. Even if the current trends continue state leaders are still looking at standstill budgets for the next fiscal year. 

Income Tax Elimination Would Yield 312,000 More Jobs, Higher Personal Income, Better Economy

By Patrick B. McGuigan (Published: 29-Nov-2011) 


Economist Arthur Laffer has outlined an historic proposal for transformation of Oklahoma state government's system of taxation and revenue. Guiding a trio of leading American tax researchers, Professor Laffer projects dramatic positive results if policymakers pursue phased-in reductions of state personal income tax rates, leading to eventual elimination of the unpopular levy. 

Assessment of the positive impact triggered by a gradual elimination of the personal income tax comes as members of the state Legislature move to wrap up detailed study of possible tax reforms. Proposals now “in play” include ending some of the most controversial business incentives and tax credits. 


CapitolBeatOK has studied the analysis for several days. A summary of key findings in the Laffer-OCPA study, which is being released this week, follows. 

In the 17-page publication co-published by the Oklahoma Council of Public Affairs (OCPA) and Arduin, Laffer and Moore Econometrics (ALME), analysts contend a complete phaseout of the state income tax “would create a long-lasting economic boom, benefiting generations to come.” 

Highlights include projected net growth of over 310,000 jobs more than if current policies stay in place. The analysis projects dramatic economic improvements, while acknowledging the spending impact of a shift away from Oklahoma government's present reliance on income tax revenues. 

Oklahoma Has Regained Nearly 60% of Pre-Recession Revenue

OKLAHOMA CITY – In spite of external threats, volatile markets and global instability, Oklahoma’s economy is rising above the chaos, State Treasurer Ken Miller said today as he released the state’s monthly gross receipts report.

“With yet another month of healthy collections, it appears Oklahoma’s economy is hitting its stride,” Miller said.

October collections were 7.4 percent higher than in October of last year, showing steady improvement in the state’s economy. Collections over the past 12 months are up almost nine percent from the previous 12 months.

Treasurer Ken Miller

Miller said gross revenue, a reflection of the state’s economic performance, has grown for 20 consecutive months.

“We have regained almost 60 percent of the revenue that disappeared during the recession,” he said. “We saw a more than $1.9 billion drop in 12-month receipts between December 2008 and February 2010. Since then, we have seen an increase of more than $1.1 billion.”

Oklahoma: A positive example

As world financial markets react to uncertainty in Washington, Europe and the Middle East, Miller said Oklahoma’s economy is setting a positive example.

“Oklahoma’s two major revenue streams, income tax and sales tax, are showing remarkable resilience,” he said. “Income tax collections – up by almost 12 percent this month – show Oklahomans are making more money, and sales tax collections – up by almost nine percent – show we are also gaining confidence.”

Miller said the latest Business Conditions Index for Oklahoma continues to reflect a positive outlook for the state’s economy. The index for October shows anticipated growth for the next three to six months.