Numbers can be deceiving at times. And so, it is the case for the February receipts in the General Revenue Fund (GRF).
On first take, deposits to the fund used by lawmakers to create the state budget were 8.3 percent above estimates last month. However, it is a quirk in the accounting because much of that was created by a change in the payment date for Oklahoma’s Promise higher education scholarship program. Corporate income tax also remains volatile.
The payment of $15.4 million to the Oklahoma’s Promise scholarship fund was switched from February to March. According to Secretary of Finance, Administration and Information Technology Preston Doerflinger, the switch was made due to cash-flow concerns.
If the switch had not occurred, February GRF deposits would have been 1.5 percent above the estimate.
“February is a historically low month for collections so we kept the projections low,” Doerflinger said. “Being above a low projection is no reason to celebrate. We have already declared a 0.7 percent revenue failure and future declarations may be necessary. Agencies should be prepared.”
Even with the delay for the scholarship fund deposit, the state had to borrow money from other treasury funds to make the necessary allocations to state agencies.
GRF collections were $248 million in February. So far for the year, GRF deposits have been $3.1 billion which is two percent below estimates.
February also saw more money go out in refunds than collected revenues coming into state coffers because of the corporate income tax. According to Doerflinger, $10.7 million in personal income tax collections was used to pay for corporate tax refunds. It is the fifth straight month corporate income tax has drawn from the state instead of contributing to it.
“The instability of corporate income tax collections is evident again, and the state can’t rely on them for consistent revenue,” Doerflinger said. “We should seriously consider the governor’s proposal to eliminate this volatile revenue source, add stability to budgeting and stimulate economic development.”