Meacham: Recession Hits Tax Revenues

Oklahoma’s fiscal year has ended with evidence the state’s revenues are being deeply impacted by the nationwide recession, State Treasurer Scott Meacham announced today.

Meacham said June collections were sufficient to fund appropriated obligations for July, the first month of the new fiscal year, but action may be required in coming months.

“It appears very likely at this point that Fiscal Year 2010 revenues will e less than originally estimated by the tax commission. That means a revenue shortfall is probable,” he said. “I will be meeting with state finance officials and Governor Henry to determine if it will be necessary to begin reducing allocations to state agencies to meet the anticipated revenue shortfall.”

Preliminary reports show general revenue fund collections for Fiscal Year 2009 that ended June 30 totaled $5.519 billion. That amount was $434.7 million or 7.3 percent below the prior year and $427.8 million or 7.2 percent below the estimate.

The recession started significantly impacting Oklahoma during the last half of the fiscal year, Meacham said. During the first half of the fiscal year, July through December, collections exceeded the estimate by $189.5 million or 6.6 percent. During the final six months, January through June, collections were below the estimate by $617.3 million or 20.1 percent.

“We are seeing a slowdown in every revenue source. Only sales tax collections were higher than collections in the prior fiscal year, but they failed to meet the estimate,” he said.

“The fall off in gross production taxes on oil and gas was particularly steep. While total fiscal year gross production collections were 5.5 percent below the estimate, in the month of June they were off the estimate by 81.7 percent reflecting the current low prices of these commodities”

Net income taxes, a combination of personal and corporate income taxes, produced $2.279 billion, which was $238.9 million or 9.5 percent below the prior year and $174.8 million or 7.1 percent below the estimate.

Personal income tax collections for the year were $2.014 billion.That is $225.5 million or 10.1 percent below the prior year and $151.2 million or 7 percent below the estimate.

Corporate income tax collections were $265.6 million. That is $13.4 million or 4.8 percent below the prior year and $23.6 million or 8.2 percent below the estimate.

Gross production taxes on oil and natural gas yielded $718.5 million for the year, which was $106.7 million or 12.9 percent below prior year collections and $41.8 million or 5.5 percent below the estimate.

The state sales tax produced $1.647 billion for the year, which was $34.8 million or 2.2 percent above the prior year but $54.8 million or 3.2 percent below the estimate. Motor vehicle taxes produced $175.8 million, which was $75.9 million or 30.1 percent below the prior year and $71.1 million or 28.8 percent below the estimate.

For the fiscal year, investments by the treasurer’s office yielded $157.2 million. That is $14.2 million or 8.3 percent below the prior year.

Other revenue, including investment earnings along with taxes on insurance, inheritance, alcoholic beverages and others, produced $698.4 million for the year. This was $47.9 million or 6.4 percent below the prior year and $85.3 million or 10.9 percent below the estimate.

Share |