Oklahoma's Tax Collection Picture Darkens in February

DALLAS - Oklahoma's state tax collections plummeted in February, falling below last year's totals and significantly less than expected when the budget for fiscal 2009 was developed last year.

Preliminary reports show general revenue fund collections for February totaled $237.9 million, which was $65.4 million, or 21.6%, less than February 2008 collections and $103.9 million, or 30.4%, below the estimate.

State Treasurer Scott Meacham said the drop in collections reflects Oklahoma's participation in the national recession, and tightens the budget outlook for the state.

"The revenue picture in Oklahoma worsened during February," Meacham said. "Collections in each of the four major tax categories were below the prior year and the estimate. February collections are typically light, but this February's collections were significantly lower."

State agencies and departments should be able to function normally through the remainder of fiscal 2009 without budgets cuts necessitated by the lower revenues, according to Meacham.

"Year-to-date collections are $47.3 million or 1.3% above the estimate on which the budget is based," he said. "Since the Legislature appropriates only 95% of the estimate, there is a built-in 5% cushion. Collections for the remainder of the fiscal year would have to fall more than $297 million below the estimate before current spending commitments would be at risk."

The treasurer said revenue for fiscal 2009 remains higher than last year's totals and continue to beat expectations.

Oklahoma's general revenue collections for the first eight months of the fiscal year total $3.8 billion. That is $126.4 million, or 3.4%, higher than the same period of fiscal 2008 and $47.3 million, or 1.3%, above the estimate.

Unemployment is also increasing in Oklahoma, state labor officials said, but is still below the national average.

Oklahoma's unemployment rate rose to 5.6% in January, up from 3.8% in January 2008. The national unemployment rate in January was 7.6%, up from 7.2% in December.

More than 7,000 workers in the state lost their jobs in December and January, most of them in the manufacturing sector.

Income tax collections fell the most in February, with net collections of $7.9 million. The monthly total is down $32.8 million, or 80.6%, from February 2008 and $42.3 million, or 84.3%, below the latest estimate.

Meacham attributed the severe decline in income tax revenues to a surge in early filings by taxpayers who anticipate a refund.

Personal income tax collections totaled $46.2 million for the month, falling short of February 2008 collections by $13.4 million, or 25.5%.

The slide in energy prices is reflected in severance tax collections on oil and natural gas produced in Oklahoma. The taxes generated $40.5 million in January, which is 38% less than in February 2008 and 43.6% less than expected.

The brightest spot was in the sales tax, which brought in $125.3 million. The monthly total is 5.4% less than the estimate and 2.4% below February 2008 revenue.

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