DALLAS – A 17-month slump in Oklahoma's tax revenue has outlasted the downturn recorded after the 2008 global financial crisis, State Treasurer Ken Miller said Friday.
With the July report showing a 9.4% drop in gross receipts compared to the same month last year, the decline has continued for 17 months, Miller reported. The previous contraction lasted 14 months, he said.
If there is a positive side to the news, it's the fact that the current decline is shallower than that recorded between December 2008 and February 2010, Miller said.
"Though we are still looking for the bottom of the current economic contraction, the news is not all dire," Miller said. "To date, this downturn has not been as steep as before and unemployment rates have not risen as high."
At its peak in 2010, Oklahoma unemployment reached 7.1%. Most recent jobless figures, from June, show state unemployment at 4.8%.
Since February 2015, 12-month collections have fallen by $1.1 billion, or 8.8%, Miller said. During the recession, 12-month gross receipts shrank by $1.9 billion, or 17%, between December 2008 and February 2010.
Another state official, Oklahoma Department of Transportation executive director Mike Patterson said that the long-lasting economic slump is a worrisome trend in terms of ongoing highway needs.
Oklahoma's population grew 53% from 1970 to 2015, but ODOT's fiscal 2017 budget dropped by $370 million, Patterson said.
To compensate, Oklahoma lawmakers allowed the department to issue $200 million of bonds.
ODOT has received about 4.5% of the state's income tax revenue since 2005, but that's more than offset by some revenue from among the nation's lowest fuel taxes, Patterson told the publication Transport Topics in an interview.
Oklahoma levies a tax of 13 cents per gallon on diesel and 16 cents per gallon on gasoline.
Miller reported that July collections are down in each major source of revenue – individual income, corporate income, sales, gross production, and motor vehicle taxes.
During the past 12 months, total collections are down by 7.6% compared to the prior period and also show contraction in all major revenue streams.
The Bureau of Economic Analysis issued state gross domestic product figures in late July showing the downturn in the Oklahoma economy, which began in the second quarter of 2015, continued through the first quarter of 2016. Oklahoma's first quarter GDP was listed as having shrunk by 0.5%.
"The data would appear to indicate Oklahoma has been in a recession for at least a full year," according to the July report. "Recessions are traditionally defined as at least two consecutive quarters of GDP reduction."
After matching the national unemployment rate in May, Oklahoma's jobless rate was unchanged in June. However, national unemployment rose slightly. State unemployment was listed at 4.8% in June, while the U.S. rate was set at 4.9%.
The Business Conditions Index for Oklahoma fell further into negative territory in July. The index, based on a survey of supply managers, dropped to 45.2 in July from 48.1 in June. Numbers below 50 mean economic contraction is expected during the next three to six months.
The report for July shows gross receipts at $853.9 million, down $88.4 million, or 9.4%, from July 2015.
Gross income tax collections, a combination of individual and corporate income taxes, generated $257.7 million, a drop of $32.7 million, or 11.3%, from the previous July.
Individual income tax collections for the month are $246 million, down $29.7 million, or 10.8%, from the prior year. Corporate collections are $11.7 million, down by $3 million, or 20.2%.
Sales tax collections, including remittances on behalf of cities and counties, total $355.4 million in July. That is $23.2 million, or 6.1%, below July 2015.
Gross production taxes on oil and natural gas generated $30.5 million in July, a decrease of $10.5 million, or 25.7%, from last July. Compared to June reports, gross production collections are up by $5.1 million, or 19.9%.
Motor vehicle taxes produced $60.5 million, down by $8.7 million, or 12.5%, from the prior year.
Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $149.7 million during the month. That is $13.3 million, or 8.2%, less than last July.
During the past 12 months, August 2015 through July 2016, gross revenue totals $11 billion. That is $901.4 million, or 7.6%, below collections for the previous 12-month period.
Gross income taxes generated $4.1 billion for the period, reflecting a drop of $296.1 million, or 6.7%, from the preceding 12 months, Miller said.
