Oklahoma reports drop in oil and gas revenue for July

Gross production tax revenue on oil and gas in the early part of the new fiscal year in Oklahoma was below that of a year ago according to figures released by the Oklahoma Office of Management and Enterprise Services. Suppressed energy prices are being blamed by state leaders.

July general revenue collections were higher than the estimates and the July 2018 collections but gross production tax collections were $17.6 million or $3.9 million below the estimate and $8.5 million or 32.5% from a year ago. The collections were largely made up of natural gas collections as oil collections were negligible and not estimated for the month of July.

The state agency stated that the general revenue will not receive significant oil collections until the $150 million cap to specified funds is met.

General Revenue Fund collections in July were $499.6 million and came in at $31.1 million, or 6.6%, above the monthly estimate. This is $50.5 million, or 11.2%, above collections in July of 2018.

“Although total collections for the first month of the new fiscal year are up compared with both the estimate and prior year, the picture is clouded by a few collection anomalies as well as sluggish gross production revenues,” said Office of Management and Enterprise Services Director John Budd. “We will need to get a few more months under our belt to see where we’re headed in FY 2020.

“Gross production collections were below the monthly estimate in June and are below both the estimate and prior year collections this month. Suppressed energy prices and uncertainty in the global economy are clearly impacting this vital Oklahoma sector.”

Major tax categories in July contributed the following amounts to the GRF:

  • Total income tax collections of $240.8 million were $28.0 million, or 13.2%, above the estimate and $50.0 million, or 26.2%, above the prior year.
    Individual income tax collections of $236.8 million were $28.2 million, or 13.5%, above the estimate and $56.0 million, or 31.0%, above the prior year. The prior year comparison was also impacted by an additional reporting period this year when compared to July of 2018.
    Corporate income tax collections of $3.9 million were $0.2 million, or 5.0%, below the estimate and $6.1 million, or 60.6%, below the prior year.
  • Sales tax collections of $178.7 million were $0.7 million, or 0.4%, above the estimate and $17.0 million, or 10.5%, above the prior year.
  • Motor vehicle tax collections of $3.3 million were $1.3 million, or 61.7%, above the estimate and $15.1 million, or 82.1%, below the prior year.
  • Other revenue collections of $59.2 million were $5.0 million, or 9.2%, above the estimate and $7.1 million, or 13.6%, above the prior year.

As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual appropriated state budget. GRF collections are revenues that remain for the appropriated state budget after rebates, refunds, other mandatory apportionments and after sales and use taxes are remitted back to municipalities. In contrast, gross collections, reported by the state treasurer, are all revenues remitted to the Oklahoma Tax Commission.

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