Budget & Tax

Report: State economy grows even as oil prices remain low

March 12, 2019

Curtis Shelton

The Oklahoma State Treasurer released the monthly report for February 2019 revenue collections. The report shows Total Gross Receipts collected in February 2019 were $972 million—a 10.7 percent increase, or $94 million more, versus the same month last year. Of the four major tax sources, the gross production tax saw the largest percentage increase year-to-year at 58.3 percent. The sales tax saw the smallest increase at 1.5 percent.

Fiscal Year 2018 vs. Fiscal Year 2019 Total Gross Receipts

New revenue from House Bill 1010xx amounted to $50.7 million, or 54 percent, of the total growth for the month. This is the first time legislative changes made up more than 50 percent of revenue growth. The change in the gross production tax from 2 percent to 5 percent brought in the largest amount of new revenue at $33 million. The $1 increase in a pack of cigarettes brought in $10.5 million, while the six-cent increase in the diesel fuel tax brought in the smallest amount at $7.1 million.

Since the beginning of the fiscal year, economic growth has resulted in the state collecting $639 million more in revenue than for the same period in the prior fiscal year. Tax increases and other legislative changes have resulted in $348 million more in state revenue for the same period.

Change in Total Gross Receipts: Legislative Changes vs. Economic Growth

These collections were made in December 2018 when oil prices were at $49.52 per barrel (according to WTI), $21 below the July 2018 peak. Despite this, all revenue streams have grown compared to the prior year. This is a welcome sign that Oklahoma may be in a better position to weather lower energy prices than the last decline in 2015.