October GRF receipts below estimate and prior year
Collections fall 2.8 percent below estimate for year
OKLAHOMA CITY — General
Revenue Fund (GRF) collections in October missed the official estimate by 10.2
percent as government revenues continued softening under the weight of economic
contraction brought on by sustained low oil prices.
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.
October
GRF collections of $415 million were $47.3 million, or 10.2 percent, below the
official estimate upon which the Fiscal Year 2016 appropriated state budget was
based, and $56.6 million, or 12 percent, below prior year collections.
Total
GRF collections for the first four months of FY 2016 were $1.8 billion, which is
$51.8 million, or 2.8 percent, below the official estimate and $68.9 million,
or 3.7 percent, below prior year collections.
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, a revenue failure is declared and mandatory appropriation
reductions must occur to maintain a balanced budget.
Prior
to October, total GRF collections were just 0.3 percent below the estimate.
“The
numbers don’t lie: The state burned through half its cushion in October alone,”
said Secretary of Finance, Administration and Information Technology Preston L.
Doerflinger. “The possibility of a revenue failure is still a way off, but could
happen if there are more months like October. We’re cautiously optimistic on
one hand and fully prepared to act accordingly on the other, if necessary.”
Gov.
Mary Fallin last month issued a series of executive orders related to
controlling spending at agencies amid declining revenues. The governor’s orders ask agencies to dispose of
underutilized properties and plan to reduce nonessential spending by 10 percent,
among other things.
“The
governor showed necessary leadership in advising agencies to make nonessential
spending reductions sooner rather than later. With revenues as they are, it’s
wise to be proactive and manage expectations, both of which are being done,” said
Doerflinger, who is Fallin’s lead budget negotiator with the Legislature.
In
August, Doerflinger began holding budget meetings with legislative budget chairmen
that typically do not begin until the legislative session starts in February. All
agencies have been involved in the meetings and are being asked to collaborate
on ways to mitigate budget reductions.
“We
have a real challenge ahead and we aren’t wasting any time tackling it,”
Doerflinger said. “Nobody is sticking their head in the sand. The state
can’t control the oil price, but it can and will be prepared to manage the challenge
it presents.”
Doerflinger
is director of OMES, which issues the monthly GRF reports.
Major
tax categories in October contributed the following amounts to the GRF:
-
Total
income tax collections of $178 million
were $4.1 million, or 2.4 percent, above the estimate and $33.6
million, or 15.9 percent, below the prior year.
Individual income tax collections of $178 million were $10 million, or 5.9
percent, above the estimate and $26.9 million, or 13.1 percent, below the
prior year.
Corporate income tax collections were entirely consumed by refunds and
contributed nothing to the GRF.
-
Sales
tax collections of $160.5 million
were $15.7 million, or 8.9 percent, below the estimate and $9.5 million,
or 5.6 percent, below the prior year.
-
Gross
production tax collections of $11
million were $13.5 million, or 55.2 percent, below the estimate and $436,000,
or 3.8 percent, below the prior year.
Natural gas collections of $10.7 million were $13.7 million, or 56.1
percent, below the estimate and $663,000, or 5.8 percent, below the prior
year.
Oil collections of $226,723 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.
-
Motor
vehicle tax collections of $16.8 million
were $3.5 million, or 17.2 percent, below the estimate and $1.4 million,
or 7.7 percent, below the prior year.
-
Other
revenue collections of $48.9 million
were $18.7 million, or 27.7 percent, below the estimate and $11.7 million,
or 19.3 percent, below the prior year.
Monthly revenue
tables are available on the OMES website: http://www.ok.gov/OSF/News/October_2015_Financial_Report_Data_Tables.html
Media Contact
JOHN ESTUS Director of Public Affairs (405) 521-3097 | john.estus@omes.ok.gov
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: Supporting our partners through unified business services. For more information, visit OMES.OK.gov.
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