Final FY 2016 revenues 9.4% below estimate
Midyear cut level reduction leaves $140.8M available for allocation
OKLAHOMA
CITY – June General Revenue Fund (GRF) collections missed the
estimate by 12.6 percent, causing total Fiscal Year 2016 collections to end the
year $541.3 million, or 9.4 percent, short of the estimate.
The GRF’s final FY 2016 account reconciliation showed mandatory
midyear funding cuts required by the state’s revenue failure declaration can
now be reduced, making $140.8 million available for immediate allocation.
Gov. Mary Fallin is exploring a special legislative session
to use the $140.8 million as part of a teacher pay raise package.
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.
June
GRF collections of $488.3 million were $70.1 million, or 12.6 percent, below
the official estimate upon which the Fiscal Year 2016 appropriated state budget
was based and $47.6 million, or 8.9 percent, below prior year collections.
Total
GRF collections for FY 2016 were $5.2 billion, which is $541.3 million, or 9.4
percent, below the official estimate and $521.9 million, or 9.1 percent, below
prior year collections.
Final reconciliation of FY 2016 revenues shows GRF
allocation reductions required by FY 2016’s midyear revenue failure were deeper
than necessary. The final reconciliation shows $140.8 million initially projected
as needing to be cut from agency allocations midyear did not need to be cut.
Without a special session, the $140.8 million would be distributed
equally among all agencies receiving general revenue allocations, said OMES
Director and Secretary of Finance, Administration and Information Technology
Preston L. Doerflinger. Money will not be sent to agencies until a determination
has been made on whether a special session will occur.
“Many agencies have needs, but the fact is this money
would do more good for Oklahoma in the form of a teacher pay raise than it
would equally distributed to agencies,” Doerflinger said. “A lot of agencies –
mine, for one – simply don’t have as compelling a case for the money as
education, particularly our teachers.”
Midyear GRF reductions caused by the FY 2016 revenue
failure were initially seven percent, or $412 million, but final revenue reconciliation
shows the necessary reduction level was 4.4 percent, or $272 million, which
results in $140.8 million that was cut now becoming available for allocation.
The $140.8 million is not eligible to be deposited in the
Rainy Day Fund because the funds are not true surplus funds.
“Calling these funds a surplus is like taking $7 out of
someone’s pocket, giving them $2.50 back and congratulating them on a $2.50
surplus,” Doerflinger said. “Let’s be clear: These are funds that are available
because an emergency cut level can now be reduced, not because revenues were
above expectations. The state is still in a challenging revenue environment due
to energy sector contraction and other factors. If this were a true surplus,
there would be a Rainy Day Fund deposit, which isn’t happening.”
The Board of Equalization in February had projected FY
2016 GRF collections to come in $549.3 million, or 9.6 percent, below the
official estimate. The board’s February projection revealed the state’s initial
revenue failure reduction of three percent, made in December, was insufficient,
and that a GRF allocation reduction of at least another 1.6 percent would be
necessary.
Due to significant revenue declines the state was
experiencing at the time, OMES reduced general revenue allocations by an
additional four percent to maintain the state’s constitutional requirement to
operate under a balanced budget and reduce the possibility of having to cut agency
allocations again midyear.
“We stand by the cut level we approved because instead of
cutting agencies yet again, which would have happened if the cut level was too
small, the state gets the chance to address a major priority in teacher pay,” Doerflinger
said.
Doerflinger added: “This was by no means a good year on
the revenue front, but it wound up slightly better than it looked midyear when
revenues were in a freefall along with oil prices. There is now money available
to spend from our biggest fund, the General Revenue Fund, and the state’s
second-biggest fund, the 1017 Fund, made full allocations to public schools, as
our office always projected it would.”
Doerflinger
is director of OMES, which issues the monthly GRF reports.
Major
tax categories in June contributed the following amounts to the GRF:
-
Total
income tax collections of $229.7 million were $28.5 million, or 11
percent, below the estimate and $22.5 million, or 8.9 percent, below the
prior year.
Individual income tax collections of $185 million were $18.9 million, or 9.3
percent, below the estimate and $5.2 million, or 2.9 percent, above the
prior year.
Corporate
income tax collections of $44.7 million were $9.6 million, or 17.6 percent,
below the estimate and $27.7 million, or 38.2 percent, below the prior year.
- Sales
tax collections of $155.9 million were $23.3 million, or 13 percent, below
the estimate and $7.3 million, or 4.5 percent, below the prior year.
-
Gross
production tax collections of $6.6 million were $9.3 million, or 58.6
percent, below the estimate and $114,400, or 1.8 percent, above the prior
year.
Natural gas collections of $5.7 million were $1.7 million, or 42.7
percent, above the estimate. There
was no GRF contribution from June 2015 collections.
Oil collections of $895,000 were $11 million, or 92.5 percent, below the
estimate and $5.6 million, or 86.2 percent, below the prior year.
- Motor
vehicle tax collections of $36 million were $14.3 million, or 66 percent, above
the estimate and $17.7 million, or 96.6 percent, above the prior year.
- Other
revenue collections of $60 million were $23.3 million, or 28 percent, below
the estimate and $35.5 million, or 37.2 percent, below the prior year.
Revenue tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/June_2016_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.
|
 
|
