May GRF receipts 1.5% below monthly estimate
Money returned to Rainy Day Fund for education ad valorem reimbursement
OKLAHOMA CITY — General Revenue Fund collections in May missed the official monthly estimate by 1.5 percent, providing enough revenue to cover current FY17 allocation needs and avoiding further cuts to agencies as borrowed funds are returned.
“While May’s collections were still below the monthly estimate, total collections are now on a more stable footing and, with only one month left in FY 2017, we are clearly on schedule to repay the money we were forced to borrow this fiscal year without further cuts,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger.
“If this trend continues, we anticipate ending the year in a better position than was predicted in February, which means possibly returning some of the monies pulled from agency budgets because of the revenue failure declaration. This should be some small consolation to agencies that have taken additional cuts in the FY 2018 budget. An over-reliance on one-time funding sources and legislators’ inability to pass significant structural budget reform that adopts new recurring revenue sources promises to make the upcoming fiscal year a cash-flow challenge,” Doerflinger said. “We will undoubtedly be forced to borrow again next fiscal year, and many of the sources we’ve had to tap in the past are running dry.”
GRF collections in May totaled $385.5 million, which is $6.1 million, or 1.5 percent, below the official estimate upon which the fiscal year 2017 appropriated state budget was based and $8.3 million, or 2.2 percent, above prior year collections. Total GRF collections through the first 11 months of FY 2017 are $4.5 billion, which is $196.2 million, or 4.2 percent, below the estimate and $222.1 million, or 4.7 percent, below prior year collections.
May marks only the second time in eight months that corporate income taxes contributed anything to general revenue, although still far below the estimate because of high refunds.
“This further highlights what we’ve been saying for a long time now. You can’t rely on corporate income tax collections,” Doerflinger said. “The governor had a common sense proposal to eliminate this volatility, thus adding stability to budgeting and stimulating economic development. Such a proposal was not adopted by the Legislature, leaving it that much more difficult to build a sustainable budget.”
In February, Doerflinger told the state Board of Equalization that he had to borrow from different funds in order to make monthly agency allotments for general revenue appropriations. As state law requires, these funds will be fully repaid when the FY 2017 general revenue has been reconciled and before transfers are made to the FY 2018 Cash Flow Reserve Fund at the end of the fiscal year. The following amounts reflect the status of borrowed funds:
$327 million – Total amount borrowed this year from all funds to make agency allocations
$240.7 million – Total amount borrowed from the Constitutional Reserve Fund, also known as the Rainy Day Fund
$4.2 million – Amount returned to the Rainy Day Fund last month, distributed to the Department of Human Services per HB2342
$60.185 million – Amount returned to the Rainy Day Fund this week to be distributed to the State Department of Education for Ad Valorem Reimbursement per SB 842, effective June 15, 2017
$176.3 million – Balance owed to the Rainy Day Fund to be returned after reconciliation of FY 2017 General Revenue Fund collections at FY 2017 year-end close
$83 million – Amount of the $176.4 million Rainy Day Fund balance which has been appropriated by the Legislature through SB 844, SB 852, and HB2360
$229 million - Amount left to be repaid to all funds after this month’s repayment
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 May contributed the following amounts to the GRF:
Total income tax collections of $123.7 million were $11.3 million, or 8.4 percent, below the estimate and $12.0 million, or 8.9 percent, below the prior year.
Individual income tax collections of $123.6 million were $1.6 million, or 1.3 percent, below the estimate and $12.1 million, or 8.9 percent, below the prior year.
Corporate income tax collections were $109,000 were $9.7 million, or 98.9 percent, below the estimate. Corporate tax collections contributed nothing to the GRF in the prior year.
Sales tax collections of $155.9 million were $736,000, or 0.5 percent, below the estimate and $6.8 million, or 4.6 percent, above the prior year.
Gross production tax collections of $13.7 million were $3.7 million, or 36.5 percent, above the estimate and $7.8 million, or 131.4 percent, above the prior year.
Natural gas collections of $11.4 million were $1.8, or 19.2 percent, above the estimate and $6.2 million, or 120 percent, above the prior year.
Oil collections of $2.4 million were $1.8 million, or 357.8 percent, above the estimate and $1.6 million, or 208.9 percent, above the prior year.
Motor vehicle tax collections of $17.8 million were $2.1 million, or 13.5 percent, above the estimate and $2.1 million, or 13.2 percent, above the prior year.
Other revenue collections of $74.4 million were $200,000, or 0.3 percent, above the estimate and $3.6 million, or 5.2 percent, above the prior year.
Revenue tables can be viewed on the OMES website: May 2017 Financial Report Data Tables
Director of Public Affairs
(405) 522-4265 | email@example.com
Monthly Revenue Report