Oklahoma kicked off Fiscal Year 2013 with positive revenue growth in July, as three of the four major revenue sources showed substantial gains, state Finance Secretary Preston L. Doerflinger announced Tuesday.
"Weakness in energy prices, plus rebates, led to a reduction in the rate of growth in total collections, but we made up for that in other areas as consumer confidence remained high," Doerflinger said. "That helped total receipts to beat the official estimate by more than 5 percent."
Sales tax collections to the General Revenue Fund outstripped last year's receipts by more than 9 percent, while motor vehicle tax receipts, reflecting car and truck sales, were up more than 19 percent. Combined individual and corporate income taxes climbed more than 20 percent.
"Our recovery from the Great Recession over the past two years was fueled by a boom in the oil patch, created by enhanced drilling techniques and attractive prices for oil and liquid forms of natural gas," Doerflinger said. "So we closely monitor energy prices and are hopeful they will continue their recent improvement. Of course, we are talking about commodities which can be volatile and subject to unpredictable national and international forces.
"However, I’ve been amazed so far by the resiliency of the Oklahoma economy, in midst of the ups and downs of some areas. Our July General Revenue Fund collections provide more evidence that our recovery from the recession has been more broad-based than some may think."
Doerflinger cited Oklahoma's unemployment rate of 4.7 percent, fourth lowest in the country, and a manufacturing growth rate of 5 percent, more than double the national rate of 1.9 percent.
"We have had a net gain of almost 41,000 jobs in the last 12 months, an indication that Governor Fallin's policies are succeeding in creating a better climate for job-creating businesses to prosper," the finance secretary said.
Governor Mary Fallin said, "With the fourth-lowest unemployment rate in the nation and third-best rate of job growth, the Oklahoma economy remains strong and resilient. With three of the four major revenue sources showing significant gains over last year, it's clear the state is moving in the right direction. Looking ahead to next year, we can continue to build that forward momentum by focusing on the kind of pro-business, pro-growth policies that will attract new jobs and more investment to Oklahoma."
Doerflinger said he continues to be pleased with "the fantastic growth in sales taxes. This is a leading indicator of economic well being. In Fiscal Year 2012, sales tax growth averaged 9.7 percent and we're off to a good start in FY-13.
"While it is unrealistic to expect such a hefty growth rate to continue indefinitely, our economic advances over the past two years led to restoring our state savings account to a near record level," he said. "We’ve gotten our fiscal house in order to help deal with any national events that could drag down our economy."
Doerflinger said he and his team are most concerned at the present time with political events in Washington. D.C. and the impact they may have on Oklahoma's economy and the state budget. "I’m talking growing pessimism that Congress will be unable to address the so-called 'fiscal cliff,' which would trigger trillions of dollars in budget cuts and tax increases."
Oklahoma's constitutional Rainy Day Fund was drained from $596.6 million to $2.02 during the recession, but is back up to $556 million after a record $306.8 million deposit in July.
In July, total collections for the General Revenue Fund were $389.1 million, up $6.4 million and 1.7 percent from a year ago. The amount collected for the month was $20 million and 5.4 percent above the estimate.
Major tax categories in July contributed the following amounts to the General Revenue Fund:
Income taxes – The total collected from individual and corporate income taxes in the month of July was $160.9 million for the FY-2013 General Revenue Fund, which was $27.6 million or 20.7 percent more than prior year collections and $39.1 million or 32.1 percent above the estimate.
Individual income tax receipts of $157.4 million were $27.1 million and 20.8 percent above the prior year and $40.3 million or 34.5 percent above the estimate.
Corporate tax collections contributed $3.6 million to the General Revenue Fund for the month, which was $530,000 or 17.5 percent above July 2012 collections and $1.3 million or 26.2 percent below the estimate.
Sales tax – Sales tax collections in July produced $164.5 million for General Revenue Fund, which was $13.8 million or 9.1 percent more than the prior year and $13.8 million or 9.1 percent above the estimate.
Gross production tax – Gross production tax collections from natural gas and oil in July made no contribution to the General Revenue Fund. Refunds and other required distributions absorbed collections from natural gas; and, as required by statute, the first Gross Production Oil Tax collections were distributed to specified funds – primarily for education
Motor vehicle taxes – This tax source produced $17.2 million from July collections, which was $2.7 million or 19.1 percent above the prior year and $504,610 or 3 percent above the estimate.
Other Revenue – Other revenue produced $46.6 million in July. This amount was $3.1 million or 6.2 percent below the prior year and $3.4 million or 6.8 percent below the estimate.