State officials admit they were off the mark in estimating the impact of the COVID-19 pandemic and oil crisis on Oklahoma’s General Revenue Fund collections for April. Way off the mark.
The $529.1 million in collections was 44% below the monthly estimate or $416.2 million less than predicted. It was also nearly 42% or $377.1 million less than in April of 2019.
Oil and gas gross production tax collections were far less as well.
Gross production tax collections of $45.7 million were $12.2 million, or 21.1%, below the estimate and $15.2 million, or 24.9%, below the prior year. Natural gas collections of $11.8 million were $16.5 million, or 58.3%, below the estimate and $13.5 million, or 53.4%, below the prior year. Oil collections of $34.0 were $4.2 million, or 14.2%, above the estimate and $1.7 million, or 4.7%, below the prior year.
Total GRF collections over the first 10 months of fiscal year 2020 were $486.8 million, or 8.5% below the estimate, and $388.5 million, or 6.9% below prior year collections for the same period.
“Missing this month’s estimate is not a surprise, but the magnitude is notable,” said Steve Harpe, Director of the Office of Management and Enterprise Services for Oklahoma. “These losses are, and will continue to have, a significant impact on revenue in the next month and into FY 2021. As agencies approach these next few months, many will be tasked with making difficult decisions as a result of this threefold economic gut punch.”
He explained that April is historically the month with the largest revenue collections but they were affected by not only the oil and gas crisis and COVID-19 but by the postponement of the income tax deadline from April to July.
General Collections haven’t missed the estimate by over 40% in recent history. February collections for FY 2009 missed the estimate by 30.4%, giving this month’s report the lamentable distinction of being the most abrupt loss to the GRF in a single month this decade.
Major tax categories in April contributed the following amounts to the GRF:
Total income tax collections of $230.6 million were $365.6 million, or 61.3%, below the estimate and $301.7 million, or 56.7%, below the prior year. Individual income tax collections of $223.9 million were $308.5 million, or 57.9%, below the estimate and $213.5, or 48.8%, below the prior year. Corporate income tax of $6.7 million were $57.1 million, or 89.5% below the estimate and $88.2 million, or 93.0%, below the prior year.
Sales tax collections of $165.5 million were $36.4 million, or 18.0%, below the estimate and $25.4 million, or 13.3%, below the prior year.
Motor vehicle tax collections of $2.6 million were $0.5 million, or 23.4%, above the estimate and $16.0 million, or 86.1%, below the prior year.
Other revenue collections of $84.6 million were $2.4 million, or 2.8%, below the estimate and $18.8 million, or 18.2%, below 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.
Source: OMES