By Patrick B. McGuigan
The Sooner State economy was so vibrant over the past 12 months that state government set an all-time record for tax collections.
Last week, in his monthly briefing for Capitol reporters, Treasurer Ken Miller said Oklahoma’s comparatively enviable economic position triggered a year of total tax receipts that shattered all previous records.
Through July, the 12-month cycle had produced $11.3 billion for the government. That was $12.6 million (0.1 percent) above the previous high, set in December 2008.
Miller observed, in analysis provided to The City Sentinel, “By at least this one measure, Oklahoma has regained and moved past the ground it lost during the Great Recession. The revenue recovery – from peak to peak – took four years and seven months.”
The low point in state government tax collections came in February 2010, when the 12-month running total was $9.4 billion. Since that low tide, collections have surged $1.9 billion – or 21 percent in the analysis from Miller’s office.
The high tide of revenue is the result of an 11 percent boost in motor vehicle collections, and a 4.2 percent leap in sales tax revenues. The latter was driven in part by massive recovery expenditures after spring storms, including the May tornadoes in Moore.
Energy-related receipts – from the oil and natural gas levies known as severance taxes – were higher year-over-year for the third straight month. That jump came after a prior year of stagnant or declining revenues from the oil patch.
The latest data confirms a positive surge that began in the spring, when gross production (severance) revenues began a significant recovery.
In addition to sales and severance taxes, income taxes (both personal and corporate) sailed high over the past year. The hike in receipts from income levies came despite – or, as advocates contend, because of – a fractional reduction of the top personal income tax rate, in January 2012, from 5.5 to 5.25 percent.
That one-quarter percent nip-and-tuck continued a trend over the past few years of fractional reductions eventually yielding higher state income tax revenues, despite the broader economic malaise of the Great Recession.
State tax collections from smaller categories – those imposed on fuel, tobacco, horse race gambling and alcohol — jumped 9.6 percent over the past 12 months.
Putting this in another context, Miller’s analysis said, “Between August 2012 and July 2013, gross revenue totals $11.3 billion. That is $299.81 million or 2.7 percent higher than collections for the previous 12-month period.”
The growth in government revenue comes in the midst of a continuing era of economic dynamism for Oklahoma. The state has an unemployment rate of 5.1 percent – and Oklahoma City has the nation’s second lowest big city jobless percentage. Nationwide, unemployment continues to run 7.6 percent.
Bottom line: The past 12 months brought into state coffers the largest one-year tax take in Oklahoma history.