Oil and gas applying brakes to Oklahoma economy
Oklahoma’s economy appears to be slowing, based on tax receipts derived from the oil and gas industry, Treasurer Randy McDaniel said.
October gross receipts to the Treasury were up by less than 1% compared to the prior year, restrained by falling oil and gas production tax and sales tax collections, McDaniel reported. It was the second straight month of growth below 1%.
Total monthly collections from all sources were $1.14 billion in October, up by $6.1 million, or 0.5%, from last year. October revenue reports saw collections from the gross production tax on crude oil and natural gas fall by almost 30% from the prior year, while sales tax receipts were down by about 1%.
“Gross receipts indicate Oklahoma’s economy is continuing to grow, albeit quite modestly, in spite of a pullback in two of the state’s major revenue streams,” McDaniel said. “Lower energy prices have pushed down gross production receipts. Additionally, for the fourth time in the past five months, sales tax collections are below those of the prior year.”
Monthly receipts for individual and corporate income, use, and motor vehicle taxes were all above those of October 2018 at rates ranging from 25% to 1.4%. Gross receipts for the past 12 months, at $13.74 million, are up by $1.04 billion, or 8.2%, McDaniel said.
Oklahoma’s medical marijuana tax of 7%, along with sales tax generated at licensed dispensaries, has added $41.3 million to gross receipts in the past 12 months. Of that, $18.1 million has come from the marijuana tax and $23.1 million from sales tax remitted by dispensaries.
The Oklahoma Business Conditions Index for October fell below growth neutral for the second time in the past three months, McDaniel said. October’s rate of 48.7 is down from 50.1 in September, indicating slow to no economic growth in the next three to six months.