Just how critical is the oil and gas industry to the state of Oklahoma. A new report from the Oklahoma State Chamber of Commerce says it makes up the largest single source of tax funding for public services in Oklahoma.
Entitled “Economic Impact of the Oil and Gas Industry in Oklahoma,” the more than 60-page report says that as of 2014, the mining sector, that sector where oil and gas falls under state employment reporting, paid a reported $3 billion in total taxes on production and purchases. That’s the highest of all the major sectors in the state. The mining industry’s share was one-fourth or 25% of the total taxes paid across all industries. And those taxes paid by the mining sector increased more than four-fold since 2000.
“There is no other tax stream paid by any other state industry that is comparable to oil and gas production taxes. the industry also pays a disproportionately high share of statewide corporate taxes, paying an estimated 22% in FY 2015,” claimed the report.
Take away some of the high taxes paid by the oil and gas industry and total revenue for the state would plunge dramatically.
“In short, if the oil and gas industry paid taxes at approximately the same rate as the remainder of the state economy, total state tax revenue in FY2015 would de cline by an estimated $1.2 billion. This represents 12.8% of the $9.29 billion in total tax revenue received by the state in FY 2015,” stated the report.
The chamber notes that workers in oil and gas earn twice the average compensation of workers outside the energy sector but also bear more than double the share of income tax burden.