Conservative Index Add
pagetitle

Wednesday, June 28th, 2017Last Update: Thursday, May 4th, 2017 02:03:55 PM

Gross Receipts to the State Treasury Shrink

By: Constitution Staff

For the first time since the end of the Great Recession in 2009, Gross Receipts to the state Treasury were less than the prior calendar year. That was the report from State Treasurer Ken Miller in January upon releasing the data for 2015. Annual Gross Receipts to the state Treasury contracted by 3 percent compared to calendar year 2014, and -- at $11.65 billion -- are the lowest 12-month total since May 2014. The calendar year reduction in collections compares to annual growth rates ranging from 2.5 percent to 9.6 percent between 2010 and 2014. During 2009, collections shrank by 15.9 percent compared to 2008.

"Gross collections show all four major revenue streams were impacted by the downturn in the energy industry," Miller said. "After slowing a little last month, the downward trend of revenue collections accelerated in December." Gross Receipts to the Treasury for December are $948.9 million, down by more than $93 million, or almost 9 percent, from December 2014. It is the smallest December bottom line since 2010.

Monthly collections from oil and natural gas production taxes have been lower than the same month of the prior year for 12 consecutive months. December gross production collections are almost 48 percent lower than the previous December. Monthly receipts are based on production activity from October when the average price of benchmark West Texas Intermediate crude oil was $46.22 per barrel. It has since dropped even lower.

All major tax categories in December showed total collections less than the same month of the prior year. Across-the-board contraction has been the story for three consecutive months, with one primary exception due to non-economic factors. In November, gross income tax collections were temporarily boosted by the tax commission's PAYRight tax amnesty program.

Other indicators also indicate an economic downturn. Oklahoma's seasonally-adjusted unemployment rate was set at 4.2 percent in November, down by one-tenth of one percentage point from October. Lynn Gray, Director of Economic Research and Analysis for the Oklahoma Employment Security Commission (OESC), said the drop in the jobless rate does not signal a strengthening economy. Instead, he said the reduction is due to a declining number of continuing unemployment insurance claims as job seekers are beginning to exhaust their unemployment benefits. Over the past year, Mining & Logging -- including the energy sector -- reported the loss of 12,900 jobs in the state, while Manufacturing showed a reduction of 7,900 jobs. The Business Conditions Index for Oklahoma in December remained below growth neutral for an eighth consecutive month and fell to 35.5 from November's 37.5. Numbers below 50 indicate economic contraction is expected during the next three to six month.

Gross revenue totaled $11.65 billion during calendar year 2015. That is $361.75 million or 3 percent lower than collections from calendar year 2014. Gross income taxes generated $4.42 billion for the period, reflecting an increase of $159.37 million or 3.7 percent from the prior year.

Personal income tax collections total $3.79 billion, up by $71.54 million or 1.9 percent from the prior year. Corporate collections are $627.4 million for the period, an increase of $87.83 million or 16.3 percent over the previous period. Sales taxes for the period generated $4.38 billion, a decrease of $71.82 million or 1.6 percent from the prior year. Oil and gas gross production tax collections brought in $474.26 million during the calendar year, down by $409.56 million or 46.3 percent from 2014. Motor vehicle collections total $763.92 million for the period. This was a drop of $13.94 million or 1.8 percent from the trailing period. Other sources generated $1.61 billion, down $25.81 million or 1.6 percent from the previous year.

Since March 2011, the Treasurer's Office has issued the monthly Gross Receipts to the Treasury report, which provides a timely and broad view of the state's macro economy. It is provided in conjunction with the General Revenue Fund (GRF) allocation report from the Office of Management and Enterprise Services (OMES), which provides important information to state agencies for budgetary planning purposes. The GRF receives just less than half of the state's gross receipts with the remainder paid in rebates and refunds, remitted to cities and counties, and placed into other state funds.

The reduction in state revenues will have a major impact on the funds that the Oklahoma Legislature has available for appropriation in the coming fiscal year which begins on July 1. The Board of Equalization met on December 21 and approved an estimate of revenues available for certification for the next appropriated state budget that shows a preliminary budget hole of at least $900.8 million.

Under state law, Gov. Mary Fallin must use the estimate to build the executive budget that will be presented to the Legislature when it convenes Feb. 1. The board approved an estimate of $6,059,238,267 in available revenue for the FY 2017 executive budget proposal. That amount is $900.8 million, or 12.9 percent, less than was authorized following passage of the FY 2016 appropriated state budget during the 2015 legislative session.

The board will meet again in February to make a second estimate that will be used by the governor and legislators to determine the final FY 2017 appropriations levels for state agencies. "As always, February's number matters more than December's," said Secretary of Finance, Administration and Information Technology Preston Doerflinger. "We don't expect it to get better, so we've been fully engaged since summer with agencies and legislators to partner in rising to this challenge."

By law, Rainy Day Fund appropriations and certain revolving fund authorizations are not factored into the board's estimates. With those spending areas considered, there will be nearly $1.1 billion less to appropriate next session than was appropriated for FY 2016. "The board's number today is $900.8 million, but in reality this is a hole of over a billion dollars that probably grows in February unless there is a dramatic oil price turnaround," Doerflinger said.

The board also received an updated FY 2016 revenue estimate that projects a shortfall for the fiscal year, which began July 1 and ends June 30, 2016. The updated estimate projects FY 2016 General Revenue Fund (GRF) collections will miss the official estimate upon which the FY 2016 appropriated state budget was based by 7.7 percent, or $443.3 million.

By law, if GRF collections are projected to fall more than five percent below the estimate for the remainder of the fiscal year, the OMES director must declare a revenue failure and initiate mandatory appropriation reductions to end the shortfall and maintain a balanced budget. "Each agency receiving monthly general revenue allocations will see those allocations reduced between two and four percent," Doerflinger said. To end the projected shortfall, at least $157 million must be cut through an across-the-board reduction of monthly general revenue allocations to agencies. Most, but not all, appropriated agencies receive monthly general revenue allocations.

Other Stories From Winter 2016 Issue

School Choice Reduces Racial Segregation

Brandon Dutcher
A common myth about private-school choice programs is that they are examples of white flight...

Red to the Roots

Richard Engle
Would it surprise you to hear that only 45% of partisan elected officials in Oklahoma are...

Its Biblical, NOT Political

Dr. James Taylor
Should Pastors Be Political? Words I have heard many times. Oddly enough, are; I dont think a...

Making Sense of 3% in a 1% World

Andrew K. Boyle
In a normal world, the news of Oklahomas declining state revenue would be easy to process.E...

The Crown: Too Heavy for Human Heads

John Michener
Why are conservatives across the land so upset that Planned Parenthood is selling baby parts? Did...

The National Popular Vote Fallacy

Paul R. Hollrah
In 2000, out of a total popular vote of 101,455,900, the Gore-Lieberman ticket won a narrow majority...

Is There a Gay Agenda?

David Deming
Is there a gay agenda? Of course there is. In 1975, I took a college course in psychology. The...

My Case for Budget Reform

Rep. Jason Murphey
As I considered an article regarding the need for a reform of the state budget process, I recalled a...

The Growing Federal Education Bureaucracy

Linda Murphy
Federal government bureaucrats now have new ways to be involved in every aspect of the life of a...

Article V Convention: Gambling With our Constitution

Steve Byas
We have heard tragic stories of some poor guy who blows his own brains out, losing a game of ...

THE FEDERAL PAGE (Winter 2016)

Theodore King
A Housekeeping Note on LanguageLanguage is important. In this campaign we hear candidates, pundi...

Letters to the Editor for Winter 2016

Constitution Staff
Begin All overWhile it would really be great to be able to wipe the slate clean and be...

Tidbits for Winter 2016

Constitution Staff
Oklahoma Voter Registration StatisticsOklahomas official voter registration statistics are c...

Past Judicial Reform Efforts Have Mostly Failed

Constitution Staff
Efforts to enact judicial reform are not new to the Oklahoma Legislature. In fact, a number of...

Oklahoma Judicial Reform Legislation Proposed

Constitution Staff
The next Oklahoma Legislature will consider a number of bills concerning Oklahomas judiciary and...

In The News

Constitution Staff

Gov. Fallin Signs REAL ID Compliance Bill
On March 2, Governor Mary Fallin signed House Bill 1845, the REAL ID compliance legislation. The new...

Constitution Staff

Legislature Loses Conservative Champion in David Brumbaugh
Oklahomans are mourning the passing of State Rep. David Brumbuagh (R-Broken Arrow), one of the great...

Constitution Staff

Special Elections to Fill Legislative Seats
Special Elections to fill vacancies in the Oklahoma Legislature are in progress. The vacancies are...

Constitution Staff

2018 Race for Governor
Gov. Mary Fallin, who is now entering the final two years of her second term, is prohibited by term...

Constitution Staff

Bills Move Through Oklahoma Legislature
With the close of the legislative session approaching on May 26, various bills are being considered...

Constitution Columnists

Bill Graves

Historical and Theological Foundations of Law
Noted Constitutional authority John Eidsmoe has written a legal classic on the origins and...

Theodore King

Federal Page for Spring 2017
Mullin Prepares to Break His Three-terms Pledge In 2012, Markwayne Mullin was the best speaker of...

Steve Byas

Cole, Inhofe, Lankford, Russell, Wrong on Syria
It was quite discouraging. Following the decision by President Trump to bomb a country Syria that...

© 2001 - 2009 The Oklahoma Constitution, all rights reserved.
Contact the Oklahoma Constitution by calling 405-366-1125 or emailing okconsti@aol.com
Content Management System (CMS) provided by WebTeks2010.com - Guthrie, Oklahoma.