Income taxes drive April general revenue increase
Revenues coming in above projections
OKLAHOMA CITY — Secretary of Finance and Revenue Preston L. Doerflinger announced Tuesday that collections to the General Revenue Fund (GRF) totaled $700.9 million in April, an increase of almost $90 million or 14.7 percent from the same month a year ago. Income tax collections accounted for most of the gain as total income tax receipts beat the official estimate for the month by 15.1 percent.
Total GRF collections for the first 10 months of the fiscal year are $4.6 billion, which is $40 million or about 1 percent above total collections for the same period a year ago, and $50.7 million or 1.1 percent higher than the official estimate upon which the Fiscal Year 2013 state budget is based.
“The economy is kicking and revenues are right on pace,” Doerflinger said. “Oklahoma’s economy has shown real resilience in its ability to withstand challenges like federal defense and aerospace sector cutbacks and continued natural gas revenue losses. It instills confidence to have a steadfast economy like ours in times like these.”
Compared to the same month last year, net income tax collections to the GRF were up by nearly 20 percent, with individual income tax collections up 14 percent and corporate income tax collections up 50 percent following a 40 percent increase in March. Year-to-date income tax collections are $2.1 billion, or 13.5 percent above projections.
“When Oklahoma citizens and companies do well, so do state revenues,” Doerflinger said. “Last month’s income tax aberration was just that, as we said, and shows why we always emphasize that income taxes can fluctuate greatly from month-to-month. The big picture shows this year’s income tax revenues are trending higher than anticipated.”
In addition to general growth, April’s income tax collection increase was also spurred by the Oklahoma Tax Commission reporting that it received several large payments from individuals who filed for extensions in 2012, driving collections up for the month.
With a 5 percent unemployment rate that is 2.6 percent lower than the national rate and lowest of any of its six bordering states, Gov. Mary Fallin said Oklahoma is poised for more growth.
“Pro-growth public policy pays dividends to the public and private sectors alike,” Fallin said. “Oklahoma is already doing well economically, and we’re on the cusp of doing better. Our ability to retain and attract new businesses was strengthened even more this legislative session through income tax reductions, investments in education and long-needed reform of our workers’ compensation system. We’re in a fantastic position to expand on the economic success we’ve seen these past few years.”
The balance in the state’s constitutional Rainy Day Fund is $577.5 million, a near record, after totaling just $2 when Fallin took office in January 2011.
“Another good indicator of the state’s solid financial position is that it’s looking more likely each day that the Rainy Day Fund will soon surpass $600 million for the first time ever,” Doerflinger said.
Sales tax and motor vehicle tax collections decreased in April by 3.4 percent and 12.9 percent, respectively, compared to prior year collections. The Tax Commission reported that the sales tax revenue reduction is partly tied to companies receiving higher than usual refunds that are linked to various sales tax exemptions.
“Declines in these areas are likely also influenced by our thousands of federal employees who are understandably holding back on spending in light of the federal budget uncertainty caused by sequestration. The sequester is a slow drip that we’re continuing to monitor closely,” Doerflinger said.
Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports. The GRF is the state’s main operating fund and is made up of about 70 revenue sources. It is where all state taxes and fees flow, except those dedicated or earmarked to specific programs.
Major tax categories in April contributed the following amounts to the General Revenue Fund:
- Income taxes – The total collected from individual and corporate income taxes in the month of April was $427.6 million, which was $70.6 million or 19.8 percent more than prior year collections and $56.2 million or 15.1 percent above the estimate.
Individual income tax receipts of $346.5 million were $43.5 million or 14.4 percent more than the prior year and $26.6 million or 8.3 percent above the estimate.
Corporate tax collections in April contributed $81.1 million to the GRF, which was $27 million or 50 percent above collections for the same month of 2012 and $29.6 million or 57.5 percent above the estimate.
- Sales tax – The Tax Commission apportioned $153.3 million in sales tax collections to the GRF from April collections, which was $5.3 million or 3.4 percent less than the prior year and $15 million or 8.9 percent below the estimate.
- Gross production tax – Gross production tax collections from April contributed $34.5 million to the GRF after rebates. This amount is $19.6 and 131 percent above April collections from 2012 and $8.7 million or 20.2 percent below the estimate.
Collections from natural gas accounted for $8.3 million, which was $6.6 million or 44.5 percent below prior year collections and $0.2 million or 2 percent below the estimate.
Collections from gross production oil taxes contributed $26.2 million to the General Revenue Fund. No oil collections were deposited into the GRF in April of 2012. The oil tax contributions were $8.6 million or 24.6 percent below the estimate.
- Motor vehicle taxes – Motor vehicle taxes produced $16.9 million from April collections, which was $2.5 million or 12.9 percent less than the prior year and $2.8 million or 14.2 percent below the estimate.
- Other revenue – Other revenue produced $68.7 million for the GRF in April. This amount was $7.7 million or 12.6 percent more than the prior year and $5 million or 7.8 percent above the estimate.
Monthly revenue tables available on the OMES website.
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About the Office of Management and Enterprise Services
The Office of Management and Enterprise Services provides financial, property, purchasing, human resources and information technology services to all state agencies, and assists the Governor’s Office on budgetary policy matters. Our mission: To lead, support, and serve. For more information, visit OMES.OK.gov.