Even though natural gas and crude oil prices
are lower than expected, Oklahoma’s total revenue collections continue to rise,
driven primarily by income and sales, State Treasurer Ken Miller said today as
he released the monthly gross receipts report for May.
“With incomes climbing and sales tax collections on the
rise, Oklahomans continue to show confidence in the economy in spite of renewed
global uncertainty and a pullback in U.S. job growth,” Miller said.
May collections are up by 5.8 percent from May of last year,
Miller said. That compares to average growth over the past 12 months of 9.2
percent.
Watching natural gas
and oil prices
In May, collections from gross production taxes on oil and
natural gas were less than the same month of the prior year for a sixth
consecutive month, and for the seventh time in eight months. Reflecting the
continued downward slide in gross production collections, the 12-month running
total for that revenue source turned negative this month.
The percentage of total gross production taxes generated by
natural gas production has steadily fallen since last year. In October, 51
percent of gross production collections came from gas extraction. By April, the
amount had dropped to 32 percent. The proportion of the tax produced by natural
gas for May is not yet available.
Gross production collections in May reflect prices and
production from March, when the spot price for natural gas at the Henry Hub in
Louisiana, considered a benchmark for gas prices, averaged $2.06 per thousand
cubic feet. April prices dropped to an average of $2.01, but May prices rose to
an average of $2.51.
In the past month, the price of crude oil has also trended
downward. From late February until the end of April, the spot price of West
Texas Intermediate Crude Oil at Cushing stayed above $100 per barrel. In May,
crude prices dropped throughout the month, closing May 31 at $86.53/bbl, levels
not seen since last October.
Rig counts last week were set at 192 total, 22 higher than
at the same time last year. However, active natural gas rigs have dropped from
122 last year to 53 this year. Active oil rigs have climbed from 48 last year
to 139 this year.
“In the coming months, we will be keeping a close watch on
natural gas and crude oil prices and any potential spillover effect on the
Oklahoma economy,” Miller said.
Overall growth seen
Income tax collections have risen by double-digits from the
same month of the previous year in nine of the past 12 months, while sale tax
collections have averaged eight percent growth during the same time.
Since hitting the trough on revenue collections from the
recession in February 2010, 12-month collections have increased by $1.63
billion and are now only $289 million below the peak in December 2008.
Miller pointed to the latest reports on state and local
unemployment as bright spots.
“At 5.0 percent, the April unemployment rate for Oklahoma is
more than three percentage points lower than the national rate. Oklahoma City’s
rate of 4.0 percent is the lowest of the nation’s 49 largest cities and speaks
to the strength of the rebounding economy,” he said. “Reports show 38,500 more
Oklahomans have jobs now than a year ago.”
May collections
The revenue report for May sets gross collections at $858.9
million, up $46.7 million or 5.8 percent from May 2011.
Gross income tax collections, a combination of personal and
corporate income taxes, generated $268.5 million, an increase of $35.2 million
or 15.1 percent from the previous May.
Personal income tax collections for the month are $258.2
million, up $35.9 million or 16.1 percent from the prior year. Corporate
collections are $10.3 million, down by $600,000 or 5.8 percent.
Sales tax collections, including remittances on behalf of
cities and counties, total $335.5 million in May. That is $21.6 million or 6.9
percent above May 2011.
Gross production taxes on oil and natural gas generated
$63.1 million in May, a decrease of $32.5 million or 34 percent from last May.
Compared to April reports, gross production collections are up by $1.1 million
or 1.8 percent.
Motor vehicle taxes produced $62.3 million, up by $6.5
million or 11.6 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 $129.5 million during the month. That is $16 million or 14.1 percent
more than last May.
Twelve-month
collections
Between June 2011 and May 2012, gross revenue totals $10.99 billion.
That is $923.1 million or 9.2 percent higher than collections from the previous
12-month period.
Gross income taxes generated $3.85 billion for the period,
reflecting an increase of $420.5 million or 12.3 percent from the prior 12
months.
Personal income tax collections total $3.32 billion, up by
$311.6 million or 10.3 percent from the June 2010 to May 2011 period. Corporate
collections are $530.6 million for the period, an increase of $109 million or
25.9 percent over the previous period.
Sales taxes for the period generated $4 billion, an increase
of $303.9 million or 8.2 percent from the prior 12-months.
Oil and gas gross production tax collections brought in $940
million during the 12 months, down by $15.5 million or 1.6 percent from the previous
period.
Motor vehicle collections total $688.8 million for the
period. This is an increase of $58.6 million or 9.3 percent from the trailing
12 months.
Other sources generated $1.51 billion, up $155.6 million or
11.5 percent from the previous 12 months.
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