State Economy Weathering Well

Oklahoma’s total revenue collections resumed their upward trajectory in April after slipping slightly in March, while gross production taxes continued to shrink, State Treasurer Ken Miller said today as he released the monthly gross receipts report.

“Oklahoma’s economy is reflecting health and resilience in spite of the low price environment for natural gas,” Miller said.

Total collections for the month were $1.16 billion, up by almost $83 million or 7.7 percent from April of last year. Miller said all major sources of revenue saw growth over the prior year except for gross production, which fell by more than 20 percent.

Income tax collections jumped by more than 10 percent from the prior year and accounted for almost 50-cents of every dollar collected in April, the tax-filing deadline month. Sales tax collections, up by 7.1 percent, moderated slightly in April following months of double-digit growth.

Gradual Erosion

In April, collections from gross production taxes on oil and natural gas were less than the same month of the prior year for a fifth consecutive month, and for the sixth time in seven months.

During those months, the percentage of gross production taxes generated by natural gas production has steadily decreased as prices have fallen. In October, 51 percent of gross production collections came from gas extraction. By March, the amount had fallen to 34 percent. The proportion of the tax produced by natural gas for April is not yet available.

Gross production collections in April reflect prices and production from February, when the spot price for natural gas at the Henry Hub in Louisiana, considered a benchmark for gas prices, averaged $2.51 per thousand cubic feet. Since then, prices have dropped even further, averaging less than $2 per thousand cubic feet in April.

“We will closely monitor falling natural gas prices in the coming months to gauge any impact,” Miller said. “Right now, the Oklahoma economy looks good and free of any spillover effects.”

State economy weathering well

Miller said the state’s economy appears to be “weathering well the challenge” as it shows continued improvement.

“Collections in all revenue categories are up except for gross production,” he said. “Consumers appear confident in the direction of Oklahoma’s economy with sales still climbing, though at half the rate seen in March.”

Since hitting the trough on revenue collections from the recession in February 2010, 12-month collections have increased by almost $1.6 billion and are now only $336 million below the peak in December 2008.

Miller pointed to the latest reports on state unemployment as another bright spot.

“At 5.4 percent, the March unemployment rate is very good news,” he said. “Reports show 21,460 more Oklahomans have jobs now than a year ago. And this compares to a U.S. unemployment rate of 8.2 percent.”

April collections

The revenue report for April shows gross collections at $1.16 billion, up $82.7 million or 7.7 percent from April 2011.

Gross income tax collections, a combination of personal and corporate income taxes, generated $565.4 million, an increase of $55.3 million or 10.8 percent from the previous April.

Personal income tax collections for the month are $489.8 million, up $45.6 million or 10.3 percent from the prior year. Corporate collections are $75.6 million, up by $9.7 million or 14.7 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $347.3 million in April. That is $22.9 million or 7.1 percent above April 2011.

Gross production taxes on oil and natural gas generated $62 million in April, a decrease of $16.5 million or 21.1 percent from last April. Compared to March reports, gross production collections are down by $5.7 million or 8.4 percent.

Motor vehicle taxes produced $56.7 million, up by $6.9 million or 13.8 percent from the prior year.

Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $125.2 million during the month. That is $14.1 million or 12.7 percent more than last April.

Twelve-month collections

Between May 2011 and April 2012, gross revenue totals $10.95 billion. That is $954.8 million or 9.6 percent higher than collections from the previous 12-month period.

Gross income taxes generated $3.82 billion for the period, reflecting an increase of $417.4 million or 12.3 percent from the prior 12 months.

Personal income tax collections total $3.29 billion, up by $304.9 million or 10.2 percent from the May 2010 to April 2011 period. Corporate collections are $531.2 million for the period, an increase of $112.4 million or 26.8 percent over the previous period.

Sales taxes for the period generated $3.98 billion, an increase of $303.3 million or 8.3 percent from the prior 12-months.

Oil and gas gross production tax collections brought in $972.5 million during the 12 months, up by $27.5 million or 2.9 percent from the previous period.

Motor vehicle collections total $682.3 million for the period. This is an increase of $61.3 million or 9.9 percent from the trailing 12 months.

Other sources generated $1.5 billion, up $145.4 million or 10.8 percent from the previous 12 months.