September tax collections for Oklahoma's main operating fund topped projections as well as receipts for the same month a year ago, state finance officials said Tuesday.
Three of the four major contributors to the state's general revenue fund — combined income, sales and motor vehicle taxes — showed growth in September, Finance Secretary Preston Doerflinger said. Gross production taxes on oil and natural gas continued to come in below projections.
“The Oklahoma economy has been on a roll the past two years, and this report indicates to me that our recovery from the recession is still ongoing,” he said.
Total tax collections for the state's general revenue fund for September were $541.9 million, up $15.6 million, or 3 percent, from a year ago. The amount collected for the month was $19.3 million, or 3.7 percent, higher than the estimate.
The September report was better news for the state than August, when total receipts declined by 6.8 percent from the previous year mainly because of lower natural gas tax and income tax receipts.
Gross production tax collections from natural gas brought in $1.7 million and oil collections made no contribution to the general revenue fund. Natural gas gross production tax collections were $27.8 million, or 94.2 percent, below previous year collections and $17.8 million, or 91.3 percent, lower than the estimate.
Doerflinger said the general revenue fund never receives any money at the start of a fiscal year from oil taxes because the first $150 million in oil tax receipts is earmarked to education funds.
The expiration of a moratorium on energy tax credits also is causing natural gas tax collections to lag, he said.
To help the state get through a significant budget shortfall two years ago, energy companies agreed to have the state suspend for two years a rebate program on natural gas produced through certain more expensive drilling methods. It was estimated oil companies would have been paid $150 million in rebates for the two-year period, which ended July 1. Actual drilling figures, however, showed the state owes $294 million in rebates on oil from horizontal and deep wells; the state is paying back nearly $98 million a year for three years, beginning with this fiscal year.
“Fortunately, strong tax collections in other areas are making up for those losses,” Doerflinger said.
General revenue fund collections for the first quarter of this fiscal year were $1.3 billion, down $6.4 million, or 0.5 percent, from the same period a year ago, but were $22.3 million, or 1.7 percent, above the estimate.