March
GRF receipts 9% below estimate
Borrowing
necessary to make monthly agency allocations
OKLAHOMA CITY — General Revenue Fund (GRF) collections in March missed the
official monthly estimate by 9 percent and are 2.8 percent below the estimate
for the first three quarters of the fiscal year. Total GRF collections of
$352.1 million in March will be short of the amount needed to make agency monthly
allocations. About $31 million will need to be borrowed from other funds so
agencies will receive their allotments.
“We’ve been forced to do this several times this fiscal year
to avoid deeper cuts to agencies and keep government operating,” said Secretary
of Finance, Administration and Information Technology Preston L. Doerflinger.
“We will be looking to April collections and other upcoming months to make up
the difference and reconcile the borrowed funds as we are statutorily and
constitutionally required to do.”
In February, Doerflinger told the Board of Equalization that
he had to borrow from the Rainy Day Fund in order to make monthly agency
allotments for General Revenue appropriations (See “Allocation
— Collection Gap” slide presented to the Board of Equalization).
“The fact we have had
to borrow from these funds shows just how serious the state’s revenue problem is,”
Doerflinger said.
While total GRF collections are currently within 5 percent
of the estimate and further agency reductions are not required, borrowing from
other funds to make monthly agency allocations has been needed because of cash
flow issues. As presented to the Board of Equalization earlier this year,
borrowing to fill the cash flow gap was expected with March collections (See
“Allocation — Collection Gap” slide).
“If the fourth quarter declines more than expected, agencies
should be prepared for deeper cuts,” Doerflinger said. “As I’ve said several
times, it’s is absolutely necessary that the Legislature take a serious look at
ways to raise recurring revenue and keep from doing more harm.”
With March’s collections, the amount
borrowed this year to make agency allocations will increase from about $296
million to about $327 million. About $240.7 million has already been borrowed
from the Constitutional Reserve Fund. The amount borrowed from other funds will
rise from about $55 million to $86 million. As state law requires, these funds
will be paid back when the FY 17 general revenue has been reconciled and before
transfers are made to the FY 18 Cash Flow Reserve Fund at the end of the fiscal
year.
To clear up any confusion, Doerflinger asked last week for
an Oklahoma Attorney General opinion on borrowing funds from the Constitutional
Reserve Fund for monthly agency allotments.
“An accusation was made that my office and this
administration did something improper,” Doerflinger said. “That is a very
serious accusation that must be addressed and clarified. The proper place to
seek that clarity is with an official Attorney General opinion free of
political bias.”
Included in Doerflinger’s letter
to Attorney General Mike Hunter is a brief by OMES legal counsel citing 62
O.S. 34.55(A) as the allowable authority to borrow from the Constitutional
Reserve Fund, also known as the Rainy Day Fund.
“We are confident we worked within statutory and
constitutional guidelines,” Doerflinger said. “We are seeking an opinion by the
attorney general for this administration, future administrations and to counter
any false information being spread by special interest groups who are
attempting to advance their own agenda.”
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 in March totaled $352.1 million, which is
$34.9 million, or 9 percent, below the official estimate upon which the fiscal
year 2017 appropriated state budget was based and $42.2 million, or 10.7
percent, below prior year collections. Total GRF collections through the first
three quarters of FY 2017 are $3.5 billion, which is $99.8 million, or 2.8
percent, below the estimate and $231.3 million, or 6.2 percent, below prior
year collections.
March collections mark the sixth consecutive month that
corporate income tax collections were consumed by refunds and did not
contribute to the General Revenue Fund.
“You can’t rely on corporate income tax collections,”
Doerflinger said. “The Legislature must seriously consider the governor’s
common sense proposal to eliminate this volatility, thus adding stability to
budgeting and stimulating economic development.”
Doerflinger is director of OMES, which issues the monthly
GRF reports.
Major tax categories in March contributed the following
amounts to the GRF:
- Total income tax collections of $125.8
million were $20.7 million, or 14.1 percent, below the estimate and $26.6
million, or 17.4 percent, below the prior year.
Individual income tax collections of $125.8 million were
$35.6 million, or 39.5 percent, above the estimate and $17.4 million, or 16.1
percent, above the prior year.
Corporate income tax collections were entirely consumed by
refunds and contributed nothing to the General Revenue Fund for the sixth
consecutive month. For the same month last year, $44 million was deposited into
the GRF.
- Sales tax collections of $146.1 million
were $9.1 million, or 5.9 percent, below the estimate and $8.3 million, or 5.4
percent, below the prior year.
- Gross production tax collections of
$20.1 million were $10.4 million, or 106.8 percent, above the estimate and
$13.4 million, or 200.4 percent, above the prior year.
Natural gas collections of $17.8 million were $8.5 million,
or 91.9 percent, above the estimate and $11.7 million, or 192.1 percent, above
the prior year.
Oil collections of $2.3 million were $1.9 million, or 416.4
percent, above the estimate and $1.7 million, or 285.8 percent, above the prior
year.
- Motor vehicle tax collections of $18.3
million were $1.9 million, or 11.3 percent, above the estimate and $757,000, or
4.3 percent, above the prior year.
- Other revenue collections of $41.8
million were $17.3 million, or 29.3 percent, below the estimate and $21.5
million, or 34 percent, below the prior year.
Revenue tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/March_2017_Financial_Report_Data_Tables.html.
Media Contact
MICHAEL BAKER
Director of Public Affairs
(405) 522-4265 | michael.baker@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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