Oklahoma revenues fall 4.1% in October as downturn continues
Oklahoma gross receipts to the Treasury continued to decline in October as individual income tax collections dropped by 7.5% from a year earlier, indicating the state’s economic downturn has yet to subside, State Treasurer Randy McDaniel reported.
October gross receipts of $1.1 billion were down more than $47 million, or 4.1%, from October of last year, McDaniel said.
Combined gross receipts for the past 12 months total $13.2 billion, off by more than $500 million compared to collections from the previous 12 months.
“We are experiencing the spillover effect of the pandemic as it chills global demand for oil and gas,” said McDaniel. “When the energy industry is down in Oklahoma, it reduces economic activity across the state, including earned income and consumer spending.”
The gross production tax on oil and natural gas has fallen sharply every month for more than a year. Oil field employment of 33,700 is at its lowest level since prior to the 2008 financial crisis. Rig counts statewide are reported at 14 in October, compared to a peak of 213 six years ago.
Individual income tax receipts for the month are down for the first time since June, partially due to fewer unemployment checks being sent to Oklahomans, McDaniel said. Meanwhile, sales tax collections have been down every month except one since September of last year.
The Oklahoma Business Conditions Index in October remained above growth neutral for a fifth month. The October index was set at 61.1, up from 58.6 in September. Numbers above 50 indicate economic expansion is expected during the next three to six months.
The unemployment rate in Oklahoma was reported as 5.3% in September, down from 5.7% in August. The seasonally adjusted number of Oklahomans listed as jobless was reported as 99,800, according to figures released by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate was listed at 7.9% in September.
October sales tax collections were $396.1 million, a decrease of $2.8 million, or 0.7%.
Use tax receipts, collected on out-of-state purchases including online sales, generated $64 million, an increase of $3.6 million, or 6%.
Gross production taxes on oil and natural gas of $48 million represented a decrease of $23.7 million, or 33%.
Motor vehicle taxes produced $69.4 million, up by $2.5 million, or 3.7%.
The medical marijuana tax produced $5.3 million, up by $2.2 million, or 73% from the prior October.
Combined gross receipts for the past 12 months of $13.21 billion are running 3.8% or $521 million below collections from the previous 12-month period.
Gross income taxes generated $4.75 billion, reflecting an increase of $75.5 million, or 1.6%.