DALLAS – Oklahoma eked out a slight gain in revenue for February compared to the same month last year, representing the second straight month of growth after 20 months of decline, state Treasurer Ken Miller reported.
February also marked the first increase in sales tax collections since March of last year and only the fourth month of positive sales tax numbers in the past two years, Miller said.
At $759.5 million, total February Gross Receipts to the Treasury expanded by $1 million, or 0.1%, compared to February of 2016.
"State budget problems and missed estimates notwithstanding, indications from gross receipts and other measurements show a marginally improving Oklahoma economy," Miller said. "The revitalized economic activity might take some time to filter down into the state budget, but we have good reasons to remain cautiously optimistic."
State Finance Secretary Preston Doerflinger has declared a revenue failure for the remainder of the current fiscal year due to projections of General Revenue Fund allocations falling further below appropriated levels. In addition, the state Board of Equalization has certified an almost $900 million reduction in estimated revenue for Fiscal Year 2018.
Those reports factored into an S&P Global Ratings downgrade of Oklahoma's general obligation rating to AA from AA-plus last week.
Growth in gross receipts do not necessarily raise general revenue funds available to the Legislature for the budgeting process, Miller wrote. The latest report on GRF allocations will be made next week by the Office of Management and Enterprise Services.
February gross production collections from crude oil and natural gas rose to $37.9 million and were higher than the same month of the prior year for a fifth consecutive month. February collections come from December oil field activity when the average price of benchmark West Texas Intermediate crude oil was $51.97 per barrel, Miller said.
"While February sales tax and gross production collections showed improvement, both individual and corporate income tax and motor vehicle gross collections decreased from the prior year," Miller said.
Gross receipts for the past 12 months total $10.8 billion and are $624.2 million, or 5.5%, less than collections from the previous 12-month period, Miller said. Each of the state's major revenue sources – income, gross production, sales and motor vehicle taxes – are less than collections from the prior 12 months.
For a seventh consecutive month, Oklahoma's unemployment rate in January remained higher than the national jobless number, Miller noted. However, at 4.9%, the state jobless rate has decreased by one-tenth of one percentage point each month since October, he said. The U.S. unemployment rate was set at 4.8% in January.
The Oklahoma Business Conditions Index, predicting economic activity for the next three to six months, was set at 59 in February. Numbers above 50 indicate anticipated economic expansion.
February gross income tax collections, a combination of individual and corporate income taxes, generated $238.1 million, a decrease of $8.6 million, or 3.5%, from the previous February.
Individual income tax collections for the month are $232.4 million, down by $5.9 million, or 2.5%, from the prior year, Miller said. Corporate collections are $5.7 million, down by $2.7 million, or 32.4%.
"Wide monthly variances in corporate collections are not uncommon," Miller said.
Sales tax collections, including remittances on behalf of cities and counties, total $323.9 million in February. That is $2.2 million, or 0.7%, more than February of last year.
Gross production taxes on oil and natural gas generated $37.9 million during the month, an increase of $9.3 million, or 32.4 percent, from last February. Compared to January reports, gross production collections are up by $4.8 million, or 14.7 percent, over the month.
Motor vehicle taxes produced $53.5 million, down by $6.6 million, or 11%, from the prior year.