State gross receipts reach nearly $13 billion in 2018
Bolstered by tax increases and a strong economy, the Oklahoma state treasury took in about $1.5 billion more in 2018 than it did the previous calendar year, State Treasurer Randy McDaniel announced Wednesday.
The state set a new calendar year record by collecting nearly $13 billion in gross receipts in 2018, an increase of $1.52 billion, or 13.2 percent, over the previous calendar year.
Receipts for December topped $1.1 billion, up by more than $135 million (13.4 percent) compared to December 2017.
“Oklahoma's economy has been performing admirably,” 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.”
Tax hikes that were included in House Bill 1010 were responsible for about $246.6 million of 2018's increased revenues, said Tim Allen, deputy treasurer for communications and program administration. The improved economy and other factors were responsible for the remainder of the $1.5 billion increase, he said.
House Bill 1010 was the tax measure that increased the price of cigarettes by $1 a pack, hiked the cost of gasoline by 3 cents a gallon, increased the cost of diesel fuel by 6 cents a gallon, and raised the gross production incentive tax rate on new oil and natural gas wells from 2 percent to 5 percent for the first three years of production.
The full impact of the tax increases is not reflected in the 12-month totals for 2018 because those revenues didn't begin showing up in the state treasury until August, when the year was more than half over, Allen noted.
All the state's major revenue streams grew during 2018, with increases ranging from 2.5 percent for motor vehicle taxes to 84 percent for gross production taxes on oil and natural gas production.
The state collected $988.4 million from gross production taxes in 2018, a dramatic increase over the $451.2 million collected in 2017.
The gross production tax hike and higher oil prices for much of the year combined to make gross production tax collections a particularly bright spot for the state treasury.
Looking forward, a recent slide in oil prices is the cause of some concern among state budget planners.
December tax collections — the last for 2018 — reflected revenues from oil field activity in October when the West Texas Intermediate crude oil price at Cushing averaged $70.75 per barrel, the state treasurer's office said. Collections in January will reflect November production, when oil prices averaged $56.96 per barrel.
The state treasurer's report provides a broad way of measuring how Oklahoma's economy performed in 2018, but does not reveal how much money the Legislature is expected to have available to spend next session.
Less than half of the gross revenue received by the treasurer goes into the state's General Revenue Fund, which is the source of most of the state Legislature's appropriations. Other funds received by the treasurer are paid out in rebates and refunds, remitted to cities and counties and apportioned to other state funds, the treasurer's office said.
Also, state appropriations are based on fiscal years rather than calendar years. Oklahoma's fiscal years end on June 30, during the middle of the calendar year.