DALLAS — Another steep decline in energy severance tax collections last month pushed Oklahoma tax revenues below the level attained a year earlier.
Collections of $819.6 million in August were less than the previous year’s monthly receipts for the third time in the past six months, Treasurer Ken Miller said Thursday at a news conference at the state capitol in Oklahoma City.
Total monthly collections were 2.8% below those of August 2011.
Revenues from crude oil and natural gas production are down 53.7% from last year, Miller said, wiping out gains from a 10.4% increase in sales tax revenues.
Sales tax revenues totaled $357.1 million in August, up from $323.5 million last year.
“Spending by businesses and consumers continues to be strong,” Miller said. “Unfortunately, the growth in that area is insufficient to keep the overall trend from dipping into negative territory again.”
Production taxes generated $46.9 million in August, down $54.4 million from August 2011 and $11.4 million lower than in July 2012.
Revenues from Oklahoma’s energy production taxes have been lower than the previous year for nine consecutive months.
August personal income tax collections were also lower than in 2011 for a second time in three months. Oklahoma Tax Commission officials attributed the August decline in withholding taxes paid by hourly and salaried employees to an anomaly in IRS remittance deadlines.
“Low unemployment continues to strengthen personal income which in turn continues to boost purchases, but weak gross production collections drag down an otherwise healthy report.” Miller said.
Oklahoma had an unemployment rate of 4.9% in July, with Oklahoma City topping the list of U.S. cities with a 4.7% rate. The national unemployment rate in July was 8.3%.
The personal income tax brought in $221.4 million last month, down $12 million from August 2011. Corporate income taxes totaled $8 million, up $3 million from last year.
Oklahoma officials will be paying close attention to overall revenue totals in the next few months to see if the weakness in energy taxes is affecting the state economy, Miller said.
“For 10 of the past 12 months, we’ve seen the drop off in gross production collections accelerate while sales and income collections have kept growing,” he said. “It’s important to keep an eye out for spillover effects that may be attributable to weakness in oil and gas collections.”
Receipts from September 2011 through August 2012 total $11 billion, Miller said, up $603 million from the previous 12-month span.
Energy production taxes brought in $797.8 million over the period, down $237.5 million. Sales taxes collections of $4.1 billion were up $344.6 million, while the income taxes generated $3.9 billion, an increase of $328.5 million.
Miller said he was baffled by the state’s weak consumer confidence index of 42.3 in August, while the business conditions index remained strong at 53.6.
“These numbers are a bit of head scratcher,” Miller said. “Typically good retail numbers coincide with better consumer confidence data, but we are seeing conflicting measures this month. Sales reports appear to indicate higher confidence than is measured by the survey.”