Ouch: Tax Collections Off By 10%

General Revenue Fund (GRF) collections in October missed the official estimate by 10.2 percent as government revenues continued softening under the weight of economic contraction brought on by sustained low oil prices.

As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual appropriated state budget. GRF collections are revenues that remain for the appropriated state budget after rebates, refunds and mandatory apportionments. Gross collections, reported by the State Treasurer, are all revenues collected by the state before rebates, refunds and mandatory apportionments.

October GRF collections of $415 million were $47.3 million, or 10.2 percent, below the official estimate upon which the Fiscal Year 2016 appropriated state budget was based, and $56.6 million, or 12 percent, below prior year collections.

Total GRF collections for the first four months of FY 2016 were $1.8 billion, which is $51.8 million, or 2.8 percent, below the official estimate and $68.9 million, or 3.7 percent, below prior year collections.

Oklahoma state government builds a five percent cushion into every appropriated state budget to prevent mandatory budget reductions if revenues fall below the official estimate. If revenues fall more than five percent below the estimate for too long, a revenue failure is declared and mandatory appropriation reductions must occur to maintain a balanced budget.

Prior to October, total GRF collections were just 0.3 percent below the estimate.

“The numbers don’t lie: The state burned through half its cushion in October alone,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “The possibility of a revenue failure is still a way off, but could happen if there are more months like October. We’re cautiously optimistic on one hand and fully prepared to act accordingly on the other, if necessary.”

Gov. Mary Fallin last month issued a series of executive orders related to controlling spending at agencies amid declining revenues. The governor’s orders ask agencies to dispose of underutilized properties and plan to reduce nonessential spending by 10 percent, among other things.

“The governor showed necessary leadership in advising agencies to make nonessential spending reductions sooner rather than later. With revenues as they are, it’s wise to be proactive and manage expectations, both of which are being done,” said Doerflinger, who is Fallin’s lead budget negotiator with the Legislature.

In August, Doerflinger began holding budget meetings with legislative budget chairmen that typically do not begin until the legislative session starts in February. All agencies have been involved in the meetings and are being asked to collaborate on ways to mitigate budget reductions.

“We have a real challenge ahead and we aren’t wasting any time tackling it,” Doerflinger said. “Nobody is sticking their head in the sand. The state can’t control the oil price, but it can and will be prepared to manage the challenge it presents.”

Doerflinger is director of OMES, which issues the monthly GRF reports.

Major tax categories in October contributed the following amounts to the GRF:

  • Total income tax collections of $178 million were $4.1 million, or 2.4 percent, above the estimate and $33.6 million, or 15.9 percent, below the prior year.

    Individual income tax collections of $178 million were $10 million, or 5.9 percent, above the estimate and $26.9 million, or 13.1 percent, below the prior year.

    Corporate income tax collections were entirely consumed by refunds and contributed nothing to the GRF.

  • Sales tax collections of $160.5 million were $15.7 million, or 8.9 percent, below the estimate and $9.5 million, or 5.6 percent, below the prior year.
  • Gross production tax collections of $11 million were $13.5 million, or 55.2 percent, below the estimate and $436,000, or 3.8 percent, below the prior year.

    Natural gas collections of $10.7 million were $13.7 million, or 56.1 percent, below the estimate and $663,000, or 5.8 percent, below the prior year.

    Oil collections of $226,723 were entirely above the estimate due to changes related to newly spudded wells taxed at 2 percent collecting small unpredictable amounts outside the $150 million revenue cap. This amount was also entirely above prior year collections.

  • Motor vehicle tax collections of $16.8 million were $3.5 million, or 17.2 percent, below the estimate and $1.4 million, or 7.7 percent, below the prior year.
  • Other revenue collections of $48.9 million were $18.7 million, or 27.7 percent, below the estimate and $11.7 million, or 19.3 percent, below the prior year.

Monthly revenue tables are available on the OMES website: http://www.ok.gov/OSF/News/October_2015_Financial_Report_Data_Tables.html


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  1. Vernon Woods, 11 November, 2015

    If I were a teacher, I certainly would not want my salary to be dependent on unstable sales tax collections. Boren needs to try another plan.

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