Oklahoma revenue improves by $308.6 million as state economy pulls out of national slump

Okla. state revenue improves by $308.6 million

OKLAHOMA CITY — Oklahoma will have $308.6 million more than expected available in revenue in the coming fiscal year, a state board projected — a sign Gov. Brad Henry cited Monday as showing that Oklahoma is slowly pulling out of the national economic slump.

The state Board of Equalization, which is comprised of Henry and other statewide elected and appointed officials, certified that money from the general revenue fund and other sources will total more than $4.97 billion during the fiscal year that begins July 1.

That’s a 6.6 percent increase over the board’s February estimate of $4.66 billion.

Henry said the increase indicates the state’s economy is slowly improving following more than a year of declining revenue — the result of the poor economy and low energy prices.

“We’re very cautiously optimistic,” Henry said.

Ninety-five percent of the increase in revenue, or $293.2 million, will be available for appropriation to state agencies, state Finance Director Mike Clingman said.

The projections were released a week after state Treasurer Scott Meacham reported that revenue collections in May exceeded collections during the same month a year earlier as well as the official estimate — continuing a trend of improving revenue that began in February.

“That bodes well,” Henry said.

The board’s revenue projections show increases in gross production taxes on oil and natural gas as well as state income, sales and motor vehicle taxes.

It estimated that the gross production tax on natural gas will generate more than $392 million next year, a $72 million increase over February’s estimate. The gross production tax on oil is expected to be almost $13 million above the February estimate.

Individual income tax collections will rise to more than $1.7 billion, a $39.9 million increase over February’s estimate, according to the board. And revenue from the state sales tax is expected to rise to $1.58 billion, an increase of almost $41 million over the February projection.

The additional revenue includes $88 million from moratoriums on tax credit programs, fee increases and other measures to raise revenue that the Legislature approved before it adjourned May 28.

Henry said he and lawmakers “tried to be very careful” when deciding which fees to increase, choosing those that had not been raised in decades.

A new electronic ticketing program designed to photograph vehicle license plates on Oklahoma highways and send tickets to uninsured motorists is expected to raise $50 million in new revenue next year.

About $30 million is expected to be raised through an enhanced sales tax collection program that notifies buyers who purchase items from out-of-state vendors through the Internet or catalogs that they are required to pay taxes on the items.

A two-year moratorium on the rural small business capital credit program is expected to raise almost $14 million during the year, according to the board. A modification to a credit for electric cars and other clean-burning vehicles is projected to raise $4.3 million.

Additional moratoriums were placed on tax credit programs for film and music projects, rehabilitation expenses for historic buildings, the construction of energy-efficient residences and agricultural processing facilities.