Oklahoma Gross Receipts Finish Strong in 2018
By: Constitution Staff
Gross Receipts to the state Treasury grew at a double-digit pace, increasing by more than $1.5 billion during calendar year 2018, announced new State Treasurer Randy McDaniel on January 9. McDaniel received 72 percent of the vote and carried all 77 counties in the November 6 general election for state treasurer.
Gross receipts to the state Treasury for 2018 were slightly less than $13 billion and grew by 13.2 percent compared to calendar year 2017 collections. During the month of December, total receipts topped $1.1 billion and were up by more than $135 million, or 13.4 percent, compared to December 2017.
“Oklahoma’s economy has been performing admirably,” Treasurer McDaniel said. “Gross receipts have improved significantly, while unemployment remains low. These and other economic indicators point to a favorable outlook for the state, but could be restrained by the downturn in energy prices, global trade uncertainty, and stock market volatility.”
Every major revenue stream expanded during 2018 at rates ranging from 84 percent for gross production taxes on oil and natural gas production to 2.5 percent for motor vehicle taxes.
For the month of December, every major revenue source except individual income tax receipts showed growth. The tax commission reports a 1 percent reduction in individual income tax collections which was likely due to one less remittance deadline for withholding taxes this December compared to last.
Officials continue to closely watch gross production tax collections due to the recent downturn in crude oil prices. December gross production collections of $118.4 million are up by $62.2 million, or 110.7 percent, compared to December 2017. However, December collections reflect oilfield activity from October when West Texas Intermediate crude oil at Cushing averaged $70.75 per barrel. Collections in January will reflect November production, when oil prices averaged $56.96 per barrel.
Revenue generated by increased tax rates approved in House Bill 1010xx during the special session last year added $62.6 million to monthly collections, 5.5 percent of December gross receipts. The largest share, $38.5 million, came from the increase from 2 percent to 5 percent in the incentive tax rate on oil and natural gas gross production. Higher tax rates on gasoline and diesel fuel generated $9.5 million, and the $1 per pack hike in cigarette taxes added $14.6 million to December’s total.
The Oklahoma Business Conditions Index has topped growth neutral for 17 consecutive months. The December index rose to 56.4 from 55.9 in November. Numbers above 50 indicate anticipated economic growth during the next three to six months.
Oklahoma’s seasonally adjusted unemployment rate of 3.3 percent in November is down by one-tenth of a percentage point from October. The U.S. jobless rate of 3.7 percent is unchanged from the prior month, according to figures released by the Oklahoma Employment Security Commission.
Gross income taxes generated $4.4 billion in 2018, reflecting an increase of $372.5 million, or 9.2 percent, from the prior calendar year. Individual income tax collections total $3.9 billion, up by $278 million, or 7.7 percent, from the prior year. Corporate collections are $499.7 million for the period, an increase of $94.4 million, or 23.3 percent, over the previous period.
Sales taxes for the 12 months generated $4.8 billion, an increase of $404.2 million, or 9.1 percent, from the prior year.
Oil and gas gross production tax collections brought in $988.4 million during the year, up by $451.2 million, or 84 percent, from the previous year.
Motor vehicle collections total $784.3 million for the period. This is an increase of $19.4 million, or 2.5 percent, from the trailing year.
Other sources generated $2 billion, up by $269.2 million, or 16 percent, from the previous 12 months.
About Gross Receipts to the Treasury
The General Revenue Fund receives less than half of the state’s gross receipts with the remainder paid in rebates and refunds, remitted to cities and counties, and apportioned to other state funds.
The Office of the State Treasurer developed the monthly Gross Receipts to the Treasury report in order to provide a timely and broad view of the state’s macro economy. It is released in conjunction with the General Revenue Fund allocation report from the Office of Management and Enterprise Services, which provides important information to state agencies for budgetary planning purposes.
As the state’s top elected financial officer, McDaniel protects and manages the billions of taxpayer dollars deposited each year, safeguards the financial health of the state, promotes responsible fiscal policy, and operates the state’s unclaimed property program. He McDaniel chairs the Oklahoma College Savings Plan Board of Trustees and the Board of Investors for the Tobacco Settlement Endowment Trust. He is a member of the State Board of Equalization, which certifies funds available for the state budget, and the State Pension Commission.
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