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Oct. 13, 2015
September GRF receipts below estimate and prior year
Yearly collections slightly below estimate after first quarter
OKLAHOMA CITY — Revenue
for the appropriated state budget continued its steady slide in September as
General Revenue Fund (GRF) collections again missed the monthly estimate and
prior year collections.
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 and mandatory apportionments.
Gross collections, reported by the State Treasurer, are all revenues collected
by the state before rebates, refunds and mandatory apportionments.
September
GRF collections of $544.1 million were $4.8 million, or 0.9 percent, below the
official estimate upon which the Fiscal Year 2016 appropriated state budget was
based, and $16.9 million, or 3 percent, below prior year collections.
Total
GRF collections for the first quarter of FY 2016 were $1.4 billion, which is $4.4
million, or 0.3 percent, below the official estimate and $12.3 million, or 0.9
percent, below prior year collections.
“First
quarter revenues landed on decent footing, but the road ahead will be rockier,”
said Secretary of Finance, Administration and Information Technology Preston L.
Doerflinger.
Doerflinger
said there is no imminent risk of state revenues being insufficient to fund the
current year’s appropriated budget. However, Doerflinger said the possibility
of such a scenario, known as a “revenue failure,” increases if state revenues continue
contracting due to energy sector production and workforce reductions brought on
by low oil prices.
Oklahoma
state government builds a five percent cushion into every appropriated state
budget to prevent mandatory budget reductions if revenues fall below the
official estimate. If revenues fall more than five percent below the estimate
for too long, mandatory appropriation reductions must occur to maintain a balanced
budget.
“Given
the ongoing oil price challenge and resulting workforce reductions, every bit
of that five percent cushion may be needed,” Doerflinger said. “Some agencies,
including mine, are already discussing what spending adjustments may be
necessary if a midyear budget reduction were to occur. That’s not always a
pleasant discussion, but it’s certainly a prudent one considering the
circumstances.”
The governor’s office and legislative budget leaders in
August began hosting meetings with all agencies to manage revenue expectations
and collaborate on ways to address upcoming budgetary challenges.
“The
very direct message we are delivering about budgets is having the desired
effect,” Doerflinger said. “Agencies are heeding the call to hold their hands
up with ideas instead of holding hands out for more money. Excellent ideas are
already emerging from agencies ready to help mitigate the challenge by doing
their part as the state rides out this oil market slump.”
Doerflinger
is Gov. Mary Fallin’s lead budget negotiator with the Legislature and the
director of OMES, which issues the monthly GRF reports.
Major
tax categories in August contributed the following amounts to the GRF:
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Total
income tax collections of $306.5 million
were $51.6 million, or 20.2 percent, above the estimate and $14.3
million, or 4.9 percent, above the prior year.
Individual income tax collections of $225.4 million were $11 million, or 5.1
percent, above the estimate and $22.6 million, or 9.1 percent, below the
prior year.
Corporate income tax collections of $81.1 million were $40.6 million, or 100.3
percent, above the estimate and $36.8 million, or 83.3 percent, above the
prior year.
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Sales
tax collections of $154.8 million
were $23.8 million, or 13.3 percent, below the estimate and $17.2 million,
or 10 percent, below the prior year.
-
Gross
production tax collections of $9.6
million were $16.9 million, or 63.9 percent, below the estimate and $3.7
million, or 28 percent, below the prior year.
Natural gas collections of $9.5 million were $16.9 million, or 64 percent,
below the estimate and $3.8 million, or 28.3 percent, below the prior
year.
Oil collections of $39,668 were entirely above the estimate due to changes
related to newly spudded wells taxed at 2 percent collecting small
unpredictable amounts outside the $150 million revenue cap. This amount
was also entirely above prior year collections.
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Motor
vehicle tax collections of $17.8 million
were $3.2 million, or 15.1 percent, below the estimate and $1.8 million,
or 9.4 percent, below the prior year.
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Other
revenue collections of $55.5 million
were $12.4 million, or 18.3 percent, below the estimate and $8.5 million,
or 1.7 percent, below the prior year.
Monthly revenue tables are available on the OMES website:
http://www.ok.gov/OSF/News/September_2015_Financial_Report_Data_Tables.html
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