Anomalies push GRF receipts far above estimate
Sales tax declines continue
OKLAHOMA CITY – Collection anomalies caused total General Revenue Fund (GRF) receipts to surge 31 percent above the estimate in August, while sales tax collections to the GRF continued a lengthy decline.
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 August totaled $414.5 million, which is $98.3 million, or 31.1 percent, above the official estimate upon which the Fiscal Year 2017 appropriated state budget was based and $7.5 million, or 1.8 percent, above prior year collections. Total GRF collections through two months of FY 2017 are $786.3 million, which is $81.1 million, or 11 percent, above the estimate and $38.7 million, or 4.7 percent, below prior year collections.
“A series of anomalies put August revenues far above the estimate. Revenues are somewhat better than a few months ago, but certainly not 31 percent better,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger.
Personal income tax collections were the main reason August collections exceeded the estimate. Personal income tax collections were $85.5 million, or 137.9 percent, above the estimate but just $9 million, or 6.5 percent, above the prior year.
“The August personal income tax estimate was dialed down this year because August personal income collections averaged 37 percent less than July personal income collections for the past three years. That did not happen this year when August personal income tax collections bucked four years of trends and came in higher than the prior month,” Doerflinger said.
August personal income tax collections were also affected by a change from August to September of the payment of $17.5 million from personal income tax collections to the Oklahoma’s Promise scholarship fund. The change was made after monthly GRF estimates were set.
GRF collections were also driven above the estimate by the other revenue category, which contains more than 40 revenues from licenses, permits, fees, gaming, interest, investments and other deposits. Other revenue was $24.3 million, or 39.8 percent, above the estimate and $22.3 million, or 35.4 percent, above the prior year.
“Other revenues were up because interest earnings were higher than expected and a large insurance premium deposit was made earlier in the year than usual,” Doerflinger said.
Meanwhile, sales tax collections to the GRF remained below the estimate, as they have been for 18 of the past 19 months, and below the prior year, as they have been for 17 of the past 19 months. Gross sales tax collections as reported by the State Treasurer have been below the prior year for 15 of the past 19 months.
August sales tax collections were $9.9 million, or 6.1 percent, below the estimate and $9.3 million, or 5.8 percent, below the prior year. Sales tax collections typically comprise about 35 percent of the GRF’s annual collections.
“The sales tax decline is concerning and is a better gauge of where things stand than the aforementioned anomalies. The state will continue seeing sales tax declines as long as the energy sector stays depressed and until actions are taken to address the shift of consumer spending from brick and mortar operations to online outlets and the services sector,” Doerflinger said.
Major tax categories in August contributed the following amounts to the GRF:
Total income tax collections of $150.2 million were $79.1 million, or 111.3 percent, above the estimate and $6.3 million, or 4 percent, below the prior year.
Individual income tax collections of $147.5 million were $85.5 million, or 137.9 percent, above the estimate and $9 million, or 6.5 percent, above the prior year.
Corporate income tax collections of $2.7 million were $6.4 million, or 70.7 percent, below the estimate and $15.3 million, or 85.2 percent, below the prior year.
Sales tax collections of $152.4 million were $9.9 million, or 6.1 percent, below the estimate and $9.3 million, or 5.8 percent, below the prior year.
Gross production tax collections of $8.8 million were $3.7 million, or 72.8 percent, above the estimate and $273,300, or 3.2 percent, above the prior year.
Natural gas collections of $7.3 million were $2.2 million, or 43.6 percent, above the estimate and $1.2 million, or 14.2 percent, below the prior year.
Oil collections of $1.5 million were entirely above the estimate and prior year since the GRF received no contributions from oil tax collections in August of 2015 and none were estimated for current month collections.
Motor vehicle tax collections of $17.8 million were $1 million, or 6.2 percent, above the estimate and $494,700, or 2.9 percent, above the prior year.
Other revenue collections of $85.4 million were $24.3 million, or 39.8 percent, above the estimate and $22.3 million, or 35.4 percent, above the prior year.
Revenue tables can be viewed on the OMES website: August 2016 Financial Report Data Tables.
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