Sales tax dip pushes GRF receipts 4.4% below estimate
Declines persist, but are not as deep as recent months
OKLAHOMA CITY – Ongoing sales tax
declines contributed to monthly General Revenue Fund (GRF) collections opening
the new fiscal year below the estimate, albeit by a smaller margin than in
recent months.
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.
GRF
collections for July, the first month of Fiscal Year 2017, totaled $371.8
million, which is $17.2 million, or 4.4 percent, below the official estimate
upon which the Fiscal Year 2017 appropriated state budget was based and $46.2
million, or 11.1 percent, below prior year collections.
FY
2016 collections ended the year 9.4 percent below the estimate.
“July was a down month on its face, but it was an
improvement in comparison to the even bigger declines seen over the past
several months,” said Secretary of Finance, Administration and Information
Technology Preston L. Doerflinger.
The bulk of July’s decline was caused by sales tax
collections, which were below the estimate by $12.5 million, or 7.5 percent,
and the prior year by $14.1 million, or 8.4 percent.
Sales tax collections to the GRF have been below the
estimate for 17 of the past 18 months and below the prior year for 16 of the
past 18 months. Gross sales tax collections as reported by the State Treasurer
have been below the prior year for 14 of the past 18 months.
“The state is clearly entering a prolonged sales tax slump,”
Doerflinger said. “Sales tax declines are the most concerning for city
governments that provide the daily public services the citizens rely on most
often. Cities don’t have diverse revenues like the state does, so sales tax is
critical to them.”
Sales tax collections typically comprise about 35 percent
of annual GRF collections.
“This sales tax decline is a clear result of the economic
contraction caused by energy sector cutbacks, but it also reflects Oklahoma’s
outdated sales tax code,” Doerflinger said. “On top of being unable to collect
sales tax from most online sales, Oklahoma does not apply sales tax to as many
parts of the economy’s growing service sector as other states do. A narrowing
tax base coupled with cutbacks in the state’s largest economic sector is bound
to produce sales tax declines like these.”
Doerflinger
is director of OMES, which issues the monthly GRF reports.
Major
tax categories in July contributed the following amounts to the GRF:
-
Total
income tax collections of $152.6 million were $559,400, or 0.4 percent,
below the estimate and $26.4 million, or 14.7 percent, below the prior
year.
Individual income tax collections of $147.3 million were $640,900, or 0.4
percent, below the estimate and $29.3 million, or 16.6 percent, below the
prior year.
Corporate income tax collections of $5.3 million were $81,500, or 1.6
percent, above the estimate and $2.9 million, or 118.8 percent, above the
prior year.
- Sales
tax collections of $154.8 million were $12.5 million, or 7.5 percent,
below the estimate and $14.1 million, or 8.4 percent, below the prior
year.
-
Gross
production tax collections of $7.7 million were $560,500, or 7.9 percent, above
the estimate and $2.3 million, or 22.9 percent, below the prior year.
Natural gas collections of $6.3 million were $814,600, or 11.4 percent, below
the estimate and $3.7 million, or 36.7 percent, below the prior year.
Oil collections
of $1.4 million were entirely above the estimate and prior year since the GRF
received no contributions from oil tax collections in July of 2015 and none
were estimated for current month collections.
- Motor
vehicle tax collections of $15.6 million were $2.5 million, or 13.8
percent, below the estimate and $2.4 million, or 13.4 percent, below the
prior year.
- Other
revenue collections of $41 million were $2.2 million, or 5.1 percent,
below the estimate and $1 million, or 2.4 percent, below the prior year.
Revenue
tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/July_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.
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