Mixed signals with November tax collections

Oklahoma’s November tax collections contained both good news and warning signs.

Sales tax collections for the month were 8.4 percent higher than the prior year; motor vehicles tax collections were 2.2 percent higher. Both figures are signs of continuing consumer confidence in Oklahoma. On the downside, low energy prices made gross production taxes nonexistent and individual income tax collections were down 5.4 percent.

Secretary of Finance Preston Doerflinger noted total collections for the fiscal year to date are $33 million above the estimate. Still, he warned that if the federal government goes over the “fiscal cliff,” it could have dramatic impact on the state economy.

The governor’s office is drafting a state budget responsibly prepared for federal cuts of $137 million to $200 million. Oklahoma’s economy is faring well, but warning signs are on the horizon, and haphazard federal fiscal policy could easily plunge us back into recession. Stay tuned.