April GRF receipts nearly 13% below monthly estimate
Uncertainty remains for this and next fiscal year
OKLAHOMA CITY — General Revenue Fund collections in April missed the official
monthly estimate by 12.9 percent and were 4.4 percent below the estimate for the
fiscal year, leading to more uncertainty regarding deeper reductions to state
agencies as the Legislature stalls with budget proposals.
“The uncertainty that one-time revenue sources have left us with
make it difficult to build a budget,” said Secretary of Finance, Administration
and Information Technology Preston L. Doerflinger.
GRF collections in April totaled $611.8 million, which is $90.3
million, or 12.9 percent, below the official estimate upon which the fiscal
year 2017 appropriated state budget was based and $812,000, or 0.1 percent,
below prior year collections. Total GRF collections through the first 10 months of FY 2017 are $4.1 billion, which is $190.1 million, or 4.4 percent,
below the estimate and $230.5 million, or 5.3 percent, below prior year
collections.
A revenue failure was declared in February after state Board of
Equalization projections showed FY 17 collections would fall 5.7 percent below
the official estimates made in June, and agencies were notified of the 0.7 percent
reduction. If projections fall more than 5.7 percent below that original
estimate, then further agency cuts will be needed. If collections come in
better than 5.7 percent below the original estimate, then agencies receive a
refund.
While April collections were below the estimate, there were
enough to cover monthly agency allocations and pay back a portion of what was
borrowed from other funds earlier in the fiscal year. About $35 million was
returned to funds, including about $4.2 million to the Rainy Day Fund to cover
a supplemental appropriation for the Department of Human Services.
The total amount borrowed this year to make agency allocations
is about $327 million, with $240.7 million of that being borrowed from the
Rainy Day Fund. The total amount left to be repaid to all funds after this
month’s repayment will be about $292 million.
Earlier this year, Doerflinger told the state Board of
Equalization that he had to borrow from different funds, including the Rainy
Day Fund, in order to make monthly agency allotments for general revenue
appropriations (See updated “Allocation —
Collection Gap” graphic). 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.
“The fact the state’s revenue problems are so bad we were forced
to borrow from these funds in the first place just demonstrates how dire our
situation is,” Doerflinger said. “As we enter the final phases of the
legislative session, members should take note of the situation an over reliance
on one-time revenue sources has put us in.”
Once the borrowed funds are paid back from the cash reserve at
the end of the fiscal year, more borrowing to meet agency allocation needs will
be necessary, Doerflinger explained. “We will likely be borrowing as early as
July for fiscal year 2018 needs.”
Doerflinger added: “If the Legislature raids the Rainy Day Fund
for FY 2018 and fails to pass a substantial amount of recurring revenue
measures, it will be hard to see where the money will come from to make monthly
allocations. This is the cash-flow issue Oklahoma is faced with, and it’s time
for legislators to start working together and pass recurring revenue measures
that the governor can sign."
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.
Doerflinger is director of OMES, which issues the monthly GRF
reports.
Major tax categories in April contributed the following amounts
to the GRF:
- Total income tax collections of $360.3 million were
$87.5 million, or 19.5 percent, below the estimate and $10 million, or 2.7
percent, below the prior year.
Individual income tax collections of $315.9 million were $84.7 million, or
21.1 percent, below the estimate and $1.9 million, or 0.6 percent, below
the prior year.
Corporate income tax collections of $44.4 million were $2.8 million, or
5.9 percent, below the estimate and $8.1 million, or 15.5 percent, below
the prior year. April collections mark the first time in seven months that
corporate income tax collections contributed to the GRF.
- Sales tax collections of $162.9 million were $31,000,
or 0.01 percent, above the estimate and $3.6 million, or 2.3 percent, above
the prior year.
- Gross production tax collections of $14.3 million were
$1.4 million, or 11.1 percent, above the estimate and $7.8 million, or 118.9
percent, above the prior year.
Natural gas collections of $12 million were $489,000, or 3.9 percent, below
the estimate and $5.8 million, or 91.3 percent, above the prior year.
Oil collections of $2.2 million were $1.9 million, or 614.2 percent, above
the estimate and $2 million, or 897.5 percent, above the prior year.
- Motor vehicle tax collections of $16.3 million were $1.2
million, or 7 percent, below the estimate and $292,000, or 1.8 percent, below
the prior year.
- Other revenue collections of $58.1 million were $3
million, or 4.9 percent, below the estimate and $205,000, or 0.4 percent,
below the prior year.
Revenue tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/April_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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