Record state revenues are largely due to robust oil and gas sector in Oklahoma

Once again, oil and natural gas gross production tax revenue in Oklahoma gave a massive push to state revenue collections in November, helping set a record for annual collections according to State Treasurer Ken Miller.

The November oil and gas revenue totaled $118.8 million, an increase of $66.1 million or 125.3 percent from November 2017. And compared to October of this year, the November collections were up $16.7 million or 16.4 percent.

For the year, the oil and gas gross production tax revenue was $926.2 million, an increase of $405.8 million or 78 percent compared to the previous 12-month period.

November Gross Receipts to the Treasury reflect ongoing expansion in the Oklahoma economy with total collections increasing by more than 15 percent compared to the same month of last year, State Treasurer Ken Miller said.

November gross receipts, at $1 billion, and 12-month gross receipts, at $12.8 billion, are the highest on record.

“The economy continues to propel treasury collections,” Miller said. “With 20 consecutive months of growth in monthly gross receipts and unemployment at its lowest in 17 years, Oklahoma is on track to finish 2018 on a high note.”

All major revenue streams show growth in November, led by the gross production tax on crude oil and natural gas, which surged by more than 125 percent compared to November 2017.

November gross production payments reflect oilfield activity from two months prior, in September, when West Texas Intermediate crude oil at Cushing averaged $70.23 per barrel. November’s lower crude prices of about $55 per barrel will not be reflected until January remittances.

Sales tax receipts increased by 6.7 percent and motor vehicle collections were up by more than 11 percent during the month. Income tax collections grew by slightly less than 1 percent.

During the past 12 months, all major revenue streams show growth ranging from 78 percent from gross production to 2.7 percent from motor vehicle receipts.

New Tax Revenue

Revenue generated by increased tax rates approved in House Bill 1010XX earlier this year added $61.6 million to monthly collections, 6 percent of November gross receipts.

The largest share, $37.8 million, came from the increase from 2 percent to 5 percent in the incentive tax rate on oil and natural gas gross production. Higher tax rates on gasoline and diesel fuel generated $10.1 million, and the $1 per pack hike in cigarette taxes added $13.6 million to November’s total.

Other indicators

The Oklahoma Business Conditions Index has topped growth neutral for 16 consecutive months. The November index was set at 55.9, up from 55.0 in October. Numbers above 50 indicate anticipated economic growth during the next three to six months.

Oklahoma’s seasonally adjusted unemployment rate of 3.4 percent in October is down by one-tenth of a percentage point from September. The U.S. jobless rate of 3.7 percent is unchanged from the prior month, according to figures released by the Oklahoma Employment Security Commission.

November collections

November gross collections total $1 billion, up $140.1 million, or 15.7 percent, from November 2017.

Gross income tax collections, a combination of individual and corporate income taxes, generated $263.7 million, an increase of $864,491, or 0.3 percent, from the previous November.

Individual income tax collections for the month are $253.1 million, up by $772,443, or 0.3 percent, from the prior year. Corporate collections are $10.6 million, an increase of $92,048, or 0.9 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $407.7 million in November. That is $25.7 million, or 6.7 percent, more than November 2017.

Gross production taxes on oil and natural gas generated $118.8 million in November, an increase of $66.1 million, or 125.3 percent, from last November. Compared to October reports, gross production remittances are up by $16.7 million, or 16.4 percent.

Motor vehicle taxes produced $60.7 million, up by $6.2 million, or 11.3 percent, from the same month of 2017.

Other collections, consisting of about 60 different sources including use taxes, along with taxes on fuel, tobacco, and alcoholic beverages, produced $182.7 million during the month. That is $41.3 million, or 29.2 percent, more than last November.

Twelve-month collections

Gross revenue totals $12.8 billion from the past 12 months. That is $1.5 billion, or 13.1 percent, more than collections from the previous 12 months.

Gross income taxes generated $4.4 billion for the period, reflecting an increase of $405.6 million, or 10.2 percent, from the prior 12 months.

Individual income tax collections total $3.9 billion, up by $308.8 million, or 8.6 percent, from the prior 12 months. Corporate collections are $497.7 million for the period, an increase of $96.8 million, or 24.1 percent, over the previous period.

Sales taxes for the 12 months generated $4.8 billion, an increase of $419.6 million, or 9.5 percent, from the prior period.

Oil and gas gross production tax collections brought in $926.2 million during the 12 months, up by $405.8 million, or 78 percent, from the previous period.

Motor vehicle collections total $782.8 million for the period. This is an increase of $20.8 million, or 2.7 percent, from the trailing period.

Other sources generated $1.9 billion, up by $237.3 million, or 14.2 percent, from the previous 12 months.

 

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