Oklahoma General Fund Revenue Rebounding

DALLAS – Oklahoma general fund collections were up 9% in October from last year’s monthly total due to a 20% gain in personal income tax revenue and improvements in the state severance tax on oil and natural gas production.

Revenue of $913.5 million last month was $75.5 million more than in October 2011, State Treasurer Ken Miller said at a news conference Monday in Oklahoma City.

Monthly collections totals have been lagging for half a year, but Miller said the outlook is for continued improvements.

“In spite of the uncertainty surrounding the national elections and the impending fiscal cliff, Oklahoma’s economy is showing marked improvement,” Miller said. “After leveling off for some six months, revenue collections have resumed their positive trajectory.”

State revenues declined from year-earlier totals in three of the past eight months.

The improvement in severance tax revenue is a hopeful sign, Miller said.

Energy severance taxes generated $63.4 million in October, down $5 million from last October.  Collections were up by $10.3 million, or almost 20%, from September’s $53 million, which was a 40% drop from September 2011 revenues.

The 7% drop in production tax revenues was a “significant improvement from last several months,” Miller said.

“Last month, we thought we had turned a corner with extraction taxes and it now appears we have,” he said.

Oil and gas production tax collections of $758.3 million over the past 12 months are off by $276.7 million from the previous period, he said.

Oklahoma’s expected revenue for fiscal 2013 is based on a 7% tax on gas selling at the wellhead for $3.64 per 1,000 cubic feet. The current spot price for natural gas is $3.50 per 1,000 cubic feet

For every $1 decline in the price of natural gas, state revenues go down by $70 million.

Sales tax collections totaled $337.3 million, up $13 million from October 2011.

Oklahoma collected $288 million from the personal income tax in October, an increase of $48.4 million from 2011. Corporate tax collections totaled $27.7 million, a drop of $2.5 million.

Motor vehicle taxes came in $6 million higher than in 2011, with $58.3 million collected in October.

Revenues over the past 12 months total $11.1 billion, up $585 million from the earlier period. The 12-month total includes $4.13 billion of sales tax collections and $4 billion from individual and corporate income taxes. Sales tax revenue is up $330 million while income tax collections are up by a combined $497 million.

Motor vehicle collections total $707 million for the period, up $59 million. Other sources account for a total of $1.5 billion.

The revival of the state’s economy is leading to a shortage of skilled workers in some areas, Miller said.

Oklahoma’s seasonally adjusted unemployment rate of 5.2 % in September is up slightly from August, the state’s Employment Security Commission reported last week, as more people entered the job market.

The state added 10,920 jobs, the commission said, while the number of jobless went up by 2,720.

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