Oklahoma Revenue Falls 10% in September

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DALLAS – Oklahoma marked its 19th month of revenue contraction as gross receipts in September fell 10% below those of the same month last year, Treasurer Ken Miller reported.

September revenue of $939.6 million was the lowest total for the month since 2010 when the Great Recession's impact was still being felt, Miller noted. Collections during the past 12 months, at $10.9 billion, are the lowest since March 2012.

"As has been the story for almost two years, Oklahoma is feeling the effects of a supply-driven downturn in energy prices that has spilled over into the rest of the economy," Miller said. "We are monitoring discussions within OPEC on reducing oil production volumes. Should an agreement to dial back production come to fruition, it could spur oil prices and turn the current negative cycle."

Gross production taxes on crude oil and natural gas activity generated $31.5 million during the month, down by 14% from last September, and continued a string of 21 consecutive months of year-over-year contraction.

After rising slightly in August, individual income tax collections dropped by more than 12% in September, Miller said. Tax officials attribute much of the reduction to last year's tax amnesty program that generated more than $30 million in additional revenue last September. However, monthly individual income tax collections were down by more than $40 million.

Sales tax collections were down by 2.6% compared to September of last year. It marks the 16th time in the past 19 months that sales tax collections have been below that of the prior year.

For a second month in a row, Miller said, Oklahoma's unemployment rate in August was higher than the national jobless rate. The U.S. rate was set at 4.9%, while the state's rate was reported at 5.1%.

Prior to July, Oklahoma's unemployment rate had been lower than the U.S. rate for almost 26 years.

The Oklahoma Business Conditions Index, predicting economic activity for the next three to six months, was set at 40.3 in September. It is the fourth consecutive month that the state has had numbers below 50, which indicate continued economic slowing.

The report for September lists gross receipts at $939.6 million, down $100.5 million, or 9.7%, from September 2015.

Gross income tax collections, a combination of individual and corporate income taxes, generated $349.4 million, a reduction of $89 million, or 20.3%, from the previous September.

Individual income tax collections for the month are $283.3 million, down by $40.3 million, or 12.5%, from the prior year. Corporate collections are $66.1 million, down by $48.6 million, or 42.4%. Wide variances in corporate collections are not uncommon, Miller said.

Sales tax collections, including remittances on behalf of cities and counties, came to $348.4 million in September. That was $9.4 million, or 2.6%, below September of last year.

Gross production taxes on oil and natural gas generated $31.5 million during the month, a decrease of $5.2 million, or 14.2%, from last September. Compared to August reports, gross production collections are down by $332,000, or 1%, over the month.

Motor vehicle taxes produced $64.3 million, down by $3.2 million, or 4.7%, from the prior year.

During the past 12 months, October 2015 through September 2016, gross revenue totals $10.9 billion, Miller said. That is $954.2 million, or 8.1%, below collections for the previous 12-month period.

Gross income taxes generated $4 billion for the period, reflecting a drop of $420.1 million, or 9.5%, from the preceding 12 months, October 2014 through September 2015.

Individual income tax collections total $3.5 billion, down by $256 million, or 6.7%, from the prior 12 months. Corporate collections are $459.1 million for the period, a decrease of $164.1 million, or 26.3%, from the previous period.

Sales taxes for the 12 months generated $4.2 billion, a decrease of $202.5 million, or 4.6%, from the preceding period.

Oil and gas gross production tax collections brought in $341.8 million during the 12 months, down by $244.2 million, or 41.7%, from the trailing period.

 

 

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