NEWS RELEASE
Tuesday, January 13, 2004
For immediate release

FIRST SIX MONTHS REVENUE COLLECTIONS
TOP PRIOR YEAR, ESTIMATE

(OKLAHOMA CITY) General Revenue Fund collections for the first six months of the fiscal year topped prior year receipts and the Office of State Finance’s estimate, state finance officials reported today.

Preliminary reports show General Revenue Fund collections for FY-04’s first six months totaled $2.2 billion. That amount was:

• $242.5 million or 12.1 percent above the prior year; and
• $73.1 million or 3.4 percent above the estimate.

“Halfway through the fiscal year, General Revenue Fund collections are ahead of both prior year collections and the estimate,” Scott Meacham, Director of the Office of State Finance, said. “Our margin over the prior year reflects improvements in the state’s overall economy. Our position in relation to the estimate makes it unlikely that budget reductions will need to be implemented this year.”

Sales tax and individual income tax collections, two key reflections of overall economic strength, performed well in the fiscal year’s first six months and in December, Meacham said.

“Sales tax collections for the year-to-date are $40.0 million ahead of those of one year ago and $16.4 million over the estimate. I think those numbers will improve further when we see the December collections numbers,” Meacham said. “The current numbers reflect sales tax collections through December 15 or the first half of the holiday shopping season. According to various reports, the real strength of the holiday season was seen in the final days leading up to Christmas, the second half of the shopping season for tax collection purposes. We anticipate we will see even greater improvement when we add January collections to the mix.

“Our individual income tax collections also are ahead of the prior year and just about even with the year-to-date estimate. That, too, shows our economy is faring better than it was one year ago and improving at a level in line with our expectations,” Meacham said.

In coming months, however, individual income tax collections likely will begin to come in below the estimate.

“As a result of the Board of Equalization’s meeting last month, the maximum marginal individual income tax rate was reduced from 7 percent to 6.65 percent,” Meacham explained. “That change will impact our monthly individual income tax withholding collections, which is the largest part of the state’s income tax revenue.”

By fiscal year’s end, the Oklahoma Tax Commission projects a $16.0 million loss of individual income tax revenue as a result of the rate reduction.

During the first half of the current fiscal year, combined individual and corporate income taxes produced $1.0 billion, exceeding collections of one year ago by $92.8 million or 10.0 percent but were below the estimate by $8.7 million or 0.8 percent. Individual returns have produced $994.1 million, which is $66.7 million or 7.2 percent above the prior year but $4.6 million or 0.5percent below the estimate. Corporate returns produced $22.5 million, which is $4.2 million or 15.6 percent below the estimate. At the halfway point of the FY-03 fiscal year, no revenue from the corporate income tax had been deposited in the General Revenue Fund due to a law then in place.

The state sales tax produced $641.9 million for the period, which is $39.9 million or 6.6 percent above the prior year and $16.3 million or 2.6 percent above the estimate.

The gross production taxes on natural gas yielded $215.7 million during the six-month period, which is $87.4 million or 68.1 percent above the prior year and $63.7 million or 41.9 percent above the estimate.

 

Motor vehicle tax receipts, which come primarily from vehicle sales and licenses, produced $111.4 million in FY-04’s first half. This was $6.6 million or 6.3 percent above the prior year and $4.8 million or 4.5 percent above the estimate.

Other revenue, which includes a wide range of sources such as cigarettes, liquor, insurance and inheritance taxes, interest and investments, has produced $264.1 million. This is $15.7 million or 6.3 percent above the prior year but $3.1 million or 1.2 percent below the estimate.

For the month of December, preliminary reports show General Revenue Fund collections totaled $383.9 million. That amount was:

• $31.7 million or 9.0 percent above the prior year; and
• $16.6 million or 4.5 percent above the estimate.

Income taxes produced $186.1 million, which was $17.6 million or 10.4 percent above the prior year and $9.1 million or 5.1 percent above the estimate. Individual returns produced $187.1 million, which was $17.8 million or 10.5 percent above the prior year and $11.8 million or 6.7 percent above the estimate. Corporate income tax refunds exceeded collections by $1.0 million. Refunds in excess of collections historically are not uncommon in December.

The state sales tax produced $109.8 million for the month, which was $4.6 million or 4.4 percent above the prior year and was $4.2 million or 4.0 percent above the estimate.

The gross production taxes on natural gas yielded $33.0 million for the month, which was $5.6 million or 20.4 percent above the prior year and $4.8 million or 16.9 percent above the estimate.

Other revenue produced $38.1 million for the month of December. This was $2.3 million or 6.4 percent above the prior year but $1.6 million or 3.9 percent below the estimate.