Gross Receipts to the Treasury - Ok

[Pages:5]October 6, 2020

Gross Receipts to the Treasury

September 2020

Oklahoma State Treasurer Randy McDaniel

Economic Trends Continue in September

Three of the state's four major revenue streams show contraction in September's Gross Receipts to the Treasury report, similar to the picture seen in total collections during the past 12 months, State Treasurer Randy McDaniel announced on Tuesday.

September receipts from all sources total $1.15 billion, down by almost $8 million, or just less than one percent, from September of last year. Over the past year, gross receipts total $13.26 billion, down by some $468 million, or 3.4 percent, compared to the previous 12-months.

"Considering the major challenges the state faces, Oklahoma's economy has been weathering the pandemicdriven downturn relatively well," said Treasurer McDaniel. "We still have reasons for concern in the months ahead, but the perseverance reflected in the September report is encouraging."

Gross receipts from combined sales and use tax, oil and gas production, and motor vehicle taxes are down by a total of $40.2 million. The extraction

tax on oil and gas accounts for the lion's share with a $27.4 million reduction.

depressed, while drilling activity and oil field employment levels are at

historic lows.

" The gross

production tax, the state's severance tax

Oklahoma has been weathering the pandemic-driven

on oil and natural

downturn relatively

gas, is well below

well."

Combined individual and corporate income tax receipts are the lone bright

collections from the

spot, up by $21.9

prior year for a thirteenth consecutive million, or 5.1 percent, for the month.

month. Oil and gas prices remain

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Monthly Gross Receipts Change from Prior Year

30% 20% 10% -0% -10% -20% -30% -40%

Apr-20 May-20 Jun-20

Jul-20 Aug-20 Sep-20

Source: Office of the State Treasurer

State Capitol Building, Room 217 ? Oklahoma City, OK 73105 ? (405) 521-3191 ? treasurer.

Gross Receipts to the Treasury

October 6, 2020

September Gross Receipts

However, the influx of withholding taxes from unemployment payments appears to be having a noteworthy impact on the bottom line.

Other economic indicators

The Oklahoma Business Conditions Index in September remained above growth neutral for a fourth month, following three months of numbers indicating economic contraction. The September index was set at 58.6,

down from 61.8 in August. Numbers above 50 indicate economic expansion is expected during the next three to six months.

The unemployment rate in Oklahoma was reported as 5.7 percent in August, down from 7.1 percent in July. The seasonally adjusted number of Oklahomans listed as jobless was reported as 104,800, according to figures released by the U.S.

Monthly Gross Receipts vs. Prior Year

Dollar change (in $ millions) from prior year by revenue source

$100 $50

Delayed Income Tax +$360.5 MM

$0

-$50

Income Tax Gross Production

Delayed Income Tax -$414.4 MM

Motor Vehicle Sales & Use Tax

Other

-$100

Gross Receipts to Treasury

Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Jul-20

Aug-20 Sep-20

PRELIMINARY (In $ millions)

MONTHLY COMPARISON

September-19

September-20

Variance From Prior Year

$

%

Total Income Tax

430.8

452.7

21.9

5.1%

Individual Corporat e

337.4 93.4

346.4 106.4

8.9 13.0

2.6% 13.9%

Sales & Use Tax (1)

466.2

457.8

(8.4)

-1.8%

Sales Tax Use Tax

408.1 58.1

393.0 64.8

(15.1) 6.7

-3.7% 11.5%

Gross Production Motor Vehicle Other Sources (2)

TOTAL REVENUE

73.8 63.3 123.1

1,157.2

46.4 58.9 133.5

1,149.3

(27.4) (4.3) 10.4

(7.9)

-37.2% -6.8% 8.4%

-0.7%

(1) Includes Collections for Counties and Municipalities (2) Gross Collections from OTC

Details may not sum due to rounding.

Shaded area denotes U.S. recession

Source: Office of the State Treasurer

Bureau of Labor Statistics. The U.S. unemployment rate was listed at 8.4 percent in August.

September collections

Compared to gross receipts from September 2019, collections in September 2020 showed:

? Total September 2020 gross collections are $1.15 billion, down $7.9 million, or 0.7 percent.

? Gross income tax collections, a combination of individual and corporate income taxes, generated $452.7 million, an increase of $21.9 million, or 5.1 percent.

? Individual income tax collections are $346.4 million, up by $8.9 million, or 2.6 percent.

? Corporate collections are $106.4 million, an increase of $13 million, or 13.9 percent.

? Combined sales and use tax collections, including remittances on behalf of cities and counties, total $457.8 million ? a reduction of $8.4 million, or 1.8 percent.

? Sales tax collections total $393 million, a decrease of $15.1 million, or 3.7 percent.

? Use tax receipts, collected on out-of-state purchases including online sales, generated $64.8

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Gross Receipts to the Treasury

October 6, 2020

September Gross Receipts

million, an increase of $6.7 million, or 11.5 percent.

? Gross production taxes on oil and natural gas total $46.4 million, a decrease of $27.4 million, or 37.2 percent.

? Motor vehicle taxes produced $58.9 million, down by $4.3 million, or 6.8 percent.

? Other collections composed of some 60 different sources including taxes on fuel, tobacco, medical marijuana,

12-Month Gross Receipts

12 months ending Mar. 2008 ? 12 months ending Sep. 2020 (in $ millions)

$14,500

$13,500

$12,500 $11,284

$11,500 Dec-08

$12,103 Feb-15

$13,735 Oct-19

$13,262 Sep-20

SSSSSSSSSSSSSMMMMMMMMMMMMMeeeeeeeeeeeeeaaaaaaaaaaaaapprprprprprprprprprprprprr--------------------------2121111111111111111110100009089786756453423120190898

$10,500 $9,500 $8,500

$10,764 Mar-17

$9,364 Feb-10

Gross Receipts to Treasury

PRELIMINARY (In $ millions)

12 Month Period Ending

Oct 19 - Sep 20

Prior Year

Current Year

Oct 18 - Sep 19

Oct 19 - Sep 20

Total Income Tax

4,648.1

4,768.9

Individual Corporat e

4,128.2 519.9

4,104.0 664.9

Sales and Use Tax (1)

5,608.0

5,458.2

Sales Tax Use Tax

4,896.0 712.0

4,699.5 758.7

Gross Production Motor Vehicle Other Sources (2)

1,137.5 791.6

1,544.1

708.8 773.6 1,552.3

TOTAL REVENUE

13,729.3

13,261.8

(1) Includes Collections for Counties and Municipalities (2) Gross Collections from OTC

Details may not sum due to rounding.

Variance From Prior Year

$

%

120.8

2.6%

(24.2) 145.0

-0.6% 27.9%

(149.8)

-2.7%

(196.5) 46.7

-4.0% 6.6%

(428.7) (18.0) 8.2

-37.7% -2.3% 0.5%

(467.5)

-3.4%

Shaded area denotes U.S. recessions.

Source: Office of the State Treasurer

and alcoholic beverages, produced $133.5 million ? up by $10.4 million, or 8.4 percent.

Twelve-month collections

Combined gross receipts for the past 12 months (October 2019 through September 2020) compared to the prior 12 months showed:

? Gross revenue totals $13.26 billion. That is $467.5 million, or 3.4 percent, below collections from the previous 12-month period.

? Gross income taxes generated $4.77 billion, reflecting an increase of $120.8 million, or 2.6 percent.

? Individual income tax collections total $4.1 billion, down by $24.2 million, or 0.6 percent.

? Corporate collections are $664.9 million, an increase of $145 million, or 27.9 percent.

? Combined sales and use taxes generated $5.46 billion, a drop of $149.8 million, or 2.7 percent.

? Gross sales tax receipts total $4.7 billion, down by $196.5 million, or 4 percent.

? Use tax collections generated $758.7 million, an increase of $46.7 million, or 6.6 percent.

? Oil and gas gross production tax

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treasurer. ? Page 3

Gross Receipts to the Treasury

October 6, 2020

September Gross Receipts

collections generated $708.8 million, down by $428.7 million, or 37.7 percent.

? Motor vehicle collections total $773.6 million. This is a decrease of $18 million, or 2.3 percent.

? Other sources generated $1.55 billion, up by $8.2 million, or 0.5 percent.

About Gross Receipts to the Treasury

The monthly Gross Receipts to the Treasury report, developed by the state treasurer's office, provides a timely and broad view of the state's economy.

It is released in conjunction with the General Revenue Fund report from the Office of Management and Enterprise Services, which provides information to state agencies for budgetary planning purposes.

The General Revenue Fund, the state's main operating account, receives less than half of the state's gross receipts with the remainder paid in rebates and refunds, remitted to cities and counties, and apportioned to other state funds.

(in millions)

Gross Production (Extraction) Tax Collections

$130

$110

$90

$70

$50

$30 Current 12 months Prior 12 months

$10 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Source: Office of the State Treasurer

Revenue Sources as Percentage of Whole

September 2020

Past 12 Months

12% 5% 4% 6%

34%

30% 9%

Individual Income Corporate Income Sales Tax (1) Use Tax (1) Gross Production Motor Vehicle Other (2)

12% 6% 5% 6%

35%

Numbers may not sum due to rounding.

31% 5%

More information

Tim Allen Deputy Treasurer for Communications & Program Administration tim.allen@treasurer. (405) 205-4929 ? mobile

Archived reports dating to March 2011:

treasurer. ? Page 4

Gross Receipts to the Treasury

October 6, 2020

Economic Indicators

Active Rigs Active Rigs

Unemployment Rate

January 1980 ? August 2020

15.0

12.5

10.0

7.5

5.0

2.5

U.S.

Oklahoma

0

80

85

90

95

0

Shaded areas denote U.S. recessions

OK-5.7% U.S.-8.4%

5

10

15

20

Source: Bureau of Labor Statistics

Business Conditions Index

January 2011 ? September 2020

80

65

50

35

Mid-America Oklahoma

20

11

12

13

14

15

16

17

18

19

20

21

This graph predicts three-to-six-month economic movement by tracking leading indicators, including new orders, production, inventories, employment, delivery lead time and prices. Numbers below 50 indicate anticipated contraction.

Shaded area denotes U.S. recession

Source: Creighton University

Oklahoma Oil Prices & Active Rigs

January 2011 ? September 2020

300

$120

Active Rigs

Price

225

$90

150

$60

75

$30

0

$0

11 12 13 14 15 16 17 18 19 20 21

Shaded area denotes U.S. recession

Sources: Baker Hughes & U.S. EIA

Price per MMBtu Price per BBL

Gross Receipts vs. Oil & Gas Employment

January 2008 ? September 2020

80.0

$14.00

Oil & Gas Employment

12-Month Gross Receipts

65.0

$12.50

50.0

$11.00

35.0

$9.50

12-Month Gross Receipts (in $ billions)

Oil & Gas Employment (in thousands)

20.0

$8.00

08 09 10 11 12 13 14 15 16 17 18 19 20 21

Shaded areas denote U.S. recessions

Sources: BLS & State Treasurer

Oklahoma Stock Index

January 2009 ? August 2020

$70

$50Avg=$42.95

$30 $27.65

$10 09 10 11 12 13 14 15 16 17 18 19 20 21

Shaded areas denote U.S. recessions

Source: Office of the State Treasurer

Oklahoma Natural Gas Prices & Active Rigs

January 2011 ? September 2020

160

$8

Active Rigs

Price

120

$6

80

$4

40

$2

0

$0

11 12 13 14 15 16 17 18 19 20 21

Shaded area denote U.S. recessions

Sources: Baker Hughes & U.S. EIA

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