November GRF collections 11.2% over estimate
OKLAHOMA CITY —General Revenue Fund collections in November totaled $602.6 million, which is $60.9 million, or 11.2%, above the monthly estimate. This is $1.9 million, or 0.3%, above collections in November 2021. Total GRF collections for the first five months of fiscal year 2023 are $3.5 billion, which is $683.2 million, or 24.4%, above the estimate, and $498.6 million, or 16.7%, above prior year collections for the same period. Gross Production Taxes have also outperformed the prior year, in part because drilling capacity was still recovering in 2021 and in part because prices have become more volatile in the current global landscape.
"Collections performed well in November but have started to trend downward along with the broader economy," said state Chief Operating Officer and Interim OMES Director John Suter. "We must be mindful that prices are steadily increasing, and with the Federal Reserve having aggressively raised interest rates since February, unemployment is also on a slight rise."
Release note: Because Gross Production and Corporate Income Taxes are so volatile, the Legislature and previous administration passed the Revenue Stabilization Act in 2017, which created the Revenue Stabilization Fund (RSF). The RSF is the second major state savings fund after the Constitutional Reserve (Rainy Day) Fund. According to state statute, if annual revenues from Gross Production Taxes on Oil and Gas or Corporate Income Taxes exceed the 5-year average, the excess gets apportioned into the RSF instead of the GRF. This automatic apportionment stops once the RSF balance is equal to 3% of the estimated balance of the GRF certified for that fiscal year. The 5-year average is certified every year at the Board of Equalization’s February meeting, as is the cap on the RSF deposit (3% of the GRF).
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, other mandatory apportionments and after sales and use taxes are remitted back to municipalities. In contrast, gross collections, reported by the state treasurer, are all revenues remitted to the Oklahoma Tax Commission.