Slumping oil and gas affects Oklahoma’s January general revenue fund collections

The slumping oil and gas industry in Oklahoma played a role in  less-than-stellar general revenue fund collections in January. Oil collections were higher than a year ago, but not natural gas.

“Oklahoma is on track with the year-to-date figures, but we continue to see softness in the energy sector,” said Steven Harpe, director of the Office of Management and Enterprise Services. “We need to keep this in mind as we look to the rest of the year.”

Gross production tax collections from oil and gas were $67.4 million, a figure that was $11.1 million or 14.1% below the state estimate. They were also $9.7 million or 12.5% less than January collections in 2019.

Oil collections were $46.6 million, an amount that was actually $8.2 million or 21.5% higher than the estimate. The January collections were also $5.5 million or 1.3% more than a year earlier.

Natural gas collections were not as healthy as oil. With growing stockpile of natural gas and sliding prices, Oklahoma’s natural gas collections totaled $20.8 million, which was $19.3 million or 48.2% under the estimate. They were also $15.1 million or 42.2% less than January 2019.

The Office of Management and Enterprise Services reports total collections were $709.7 million and were $57.2 million or 7.5% below the monthly estimate. They were also $4.8 million or 0.7T below the collections of a year earlier.

Total GRF collections over the first seven months of fiscal year 2020 were $28.8 million, or 0.7%, below the estimate, and $60.8 million, or 1.6%, above prior year collections for the same period.

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

  • Total income tax collections of $340.7 million were $29.3 million, or 7.9%, below the estimate and $28.2 million, or 9.0%, above the prior year.
    Individual income tax collections of $298.3 million were $68.2 million, or 18.6%, below the estimate and $13.7 million, or 4.4%, below the prior year.
    Corporate income tax collections of $42.4 million were $38.9 million, or 1,129.5%, above the estimate and $41.9 million, or 8,363.2%, above the prior year.
  • Sales tax collections of $182.9 million were $19.7 million, or 9.7%, below the estimate and $8.5 million, or 4.4%, below the prior year.
  • Motor vehicle tax collections of $2.9 million were $0.8 million, or 35.1%, above the estimate and $15.4 million, or 84.1%, below the prior year.
  • Other revenue collections of $115.9 million were $2.1 million, or 1.9%, above the estimate and $0.6 million, or 0.5%, 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.

 

Sourcer: Announcement by the Office of Management and Enterprise Services.

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