Oklahoma revenues rising from April bottom
Oklahoma's June revenue fell nearly 5% below the same month last year, though it still rebounded from May levels, Treasurer Randy McDaniel said.
Total receipts in June topped $1.1 billion, which was still below collections from June 2019 by $56.4 million. That was dramatically better than April when receipts were down nearly 32% and it also marked an improvement from May’s decline of 14%.
June collections from the gross production tax, Oklahoma’s severance tax on oil and gas extraction, totaled $19.6 million, down by $72.5 million, or 78.7%, compared to the same month of last year.
“The state economy showed strength in a number of key areas last month,” McDaniel said. “However, the large drop in gross production tax receipts due to a decline in global demand shines a light on the challenges faced by a key Oklahoma industry.”
June severance tax receipts are paid on oil and gas production that occurred during April, when the price per barrel of crude oil averaged $16.55 and included an unprecedented drop to negative $36.98 on April 20. Prices have since rebounded to more than $40 per barrel. However, June extraction tax receipts are the lowest monthly total in more than 10 years.
In addition to extraction taxes, individual income and sales tax collections were below collections from June of last year. Sales tax was down by 1.9% and individual income tax dipped 0.3%. Corporate income, use, and motor vehicle tax receipts were all up by double digits.
June marked the reopening of many businesses that had been closed since mid-March and many state residents had the benefit of $1,200 stimulus payments from the federal government. Even so, the state unemployment rate was last reported as 12.6% with more than 200,000 Oklahomans out of work.
Twelve-month collections, reflecting economic performance during Fiscal Year 2020, total $13.01 billion and are down by $585.5 million, or 4.3%, from Fiscal Year 2019.
The only major revenue source showing growth for the year is the use tax, paid on out-of-state purchases including internet sales.
The unemployment rate in May was down from 14.7% in April. The seasonally adjusted number of Oklahomans listed as jobless increased by 170,265 over the year, according to figures released by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate was listed at 13.3% in April.
The Oklahoma Business Conditions Index rose above growth neutral in June, following three months of numbers indicating expected economic contraction. The June index was set at 53.1, up from 43 in May. Numbers above 50 indicate economic expansion is expected during the next three to six months.
Combined sales and use tax collections, including remittances on behalf of cities and counties, totaled $470.8 million in June. That is $575,475, or 0.1%, less than June 2019.
June sales tax collections totaled $404.8 million, a drop of $7.7 million, or 1.9% from the same month of the prior year. Use tax receipts, collected on out-of-state purchases including online sales, generated $66 million, an increase of $7.2 million, or 12.2%, over the year.