Oklahoma's economy, boosted by a healthy Christmas shopping season, continued to grow in 2012 but at a slower pace, state Treasurer Ken Miller said Thursday.
Gross receipts for December were 1.5 percent higher than the same month a year ago and collections for the year surpassed the previous year by 3.8 percent, he said. Gross receipts in 2011 had a growth rate of 9.6 percent, with December of last year posting 11.1 percent growth.
Miller said December was the eighth time in 2012 that gross collections exceeded those of the same month a year ago. Collections dipped slightly below prior year collections in the other four months. Total revenue collections are considered a reflection of the performance of the state's economy.
Sales tax collections indicate a healthy Christmas shopping season in Oklahoma, Miller said. December sales tax collections, reflecting sales between mid-November, which includes Black Friday, the traditional start of the Christmas season, and mid-December, were $20.45 million, or 5.9 percent higher than the 2011 holiday shopping season. Oklahoma showed a similar growth rate in sales tax collections sales during the same period in 2011.
Twelve-month gross revenue collections through December were $11.1 billion, or more than $1.7 billion higher than a 12-month period that included February 2010, when the state suffered its lowest revenue as a result of the 2008 recession. Since then, Oklahoma has recovered almost 90 percent of the 12-month revenue collections that peaked in December 2008 at $11.3 billion.
Miller said Oklahoma's economy should continue to fare well. The Mid-America Business Conditions Index anticipates the state's economy will continue to grow this year; it shows Oklahoma has among the best performing economies in the nine-state region, including in job creation during 2012 and in anticipated overall growth this year.
Averting the cliff
Miller, an economist, said he has mixed reactions about the “fiscal cliff” deal reached earlier this week by Congress and the president.
“The good news is that 98 percent of Americans will avoid a tax increase and the (President George W.) Bush tax cuts were made permanent, providing needed certainty to families and small businesses,” Miller said. “Quite obviously, that's good news for the Oklahoma economy as it is never advisable to raise taxes during a recession or weak recovery. Oklahoma's recovery has been stronger than in most other states, but we need our country to do well so we can continue our economic gains.”
But the treasurer said the deal did nothing to address Washington's overspending.
“During the coming months, policymakers must be cognizant of the near-term weak recovery but must finally get serious and implement a long-term solution that safeguards the economic and national security interests of our country,” he said.
Miller said the biggest problem with spending cuts that would be started in two months if no further agreement is reached is that they disregard entitlements.
“Unfortunately with sequestration, the cuts are heavily weighted toward military spending when the real problem, entitlement spending, is largely ignored,” he said. “A strong defense is critical to our nation's security and our state's economy.”
Studies show Oklahoma, which has five military installations, could lose up to 20,000 jobs, including 4,000 military positions, if sequestration is triggered, he said.
“That would be very tough for Oklahoma to handle,” Miller said. “It would be very tough for the military communities and the families in those communities if they enact these across-the-board cuts rather than the strategic cuts.”