OKLAHOMA CITY — General Revenue Fund collections in April missed the official monthly estimate by 12.9 percent and were 4.4 percent below the estimate for the fiscal year, leading to more uncertainty regarding deeper reductions to state agencies as the Legislature stalls with budget proposals.
“The uncertainty that one-time revenue sources have left us with make it difficult to build a budget,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger.
GRF collections in April totaled $611.8 million, which is $90.3 million, or 12.9 percent, below the official estimate upon which the fiscal year 2017 appropriated state budget was based and $812,000, or 0.1 percent, below prior year collections. Total GRF collections through the first 10 months of FY 2017 are $4.1 billion, which is $190.1 million, or 4.4 percent, below the estimate and $230.5 million, or 5.3 percent, below prior year collections.
A revenue failure was declared in February after state Board of Equalization projections showed FY 17 collections would fall 5.7 percent below the official estimates made in June, and agencies were notified of the 0.7 percent reduction. If projections fall more than 5.7 percent below that original estimate, then further agency cuts will be needed. If collections come in better than 5.7 percent below the original estimate, then agencies receive a refund.
While April collections were below the estimate, there were enough to cover monthly agency allocations and pay back a portion of what was borrowed from other funds earlier in the fiscal year. About $35 million was returned to funds, including about $4.2 million to the Rainy Day Fund to cover a supplemental appropriation for the Department of Human Services.
The total amount borrowed this year to make agency allocations is about $327 million, with $240.7 million of that being borrowed from the Rainy Day Fund. The total amount left to be repaid to all funds after this month’s repayment will be about $292 million.
Earlier this year, Doerflinger told the state Board of Equalization that he had to borrow from different funds, including the Rainy Day Fund, in order to make monthly agency allotments for general revenue appropriations (See updated “Allocation — Collection Gap” graphic). As state law requires, these funds will be paid back when the FY 17 general revenue has been reconciled and before transfers are made to the FY 18 Cash Flow Reserve Fund at the end of the fiscal year.
“The fact the state’s revenue problems are so bad we were forced to borrow from these funds in the first place just demonstrates how dire our situation is,” Doerflinger said. “As we enter the final phases of the legislative session, members should take note of the situation an over reliance on one-time revenue sources has put us in.”
Once the borrowed funds are paid back from the cash reserve at the end of the fiscal year, more borrowing to meet agency allocation needs will be necessary, Doerflinger explained. “We will likely be borrowing as early as July for fiscal year 2018 needs.”
Doerflinger added: “If the Legislature raids the Rainy Day Fund for FY 2018 and fails to pass a substantial amount of recurring revenue measures, it will be hard to see where the money will come from to make monthly allocations. This is the cash-flow issue Oklahoma is faced with, and it’s time for legislators to start working together and pass recurring revenue measures that the governor can sign.”
As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual appropriated state budget. GRF collections are revenues that remain for the appropriated state budget after rebates, refunds and mandatory apportionments. Gross collections, reported by the State Treasurer, are all revenues collected by the state before rebates, refunds and mandatory apportionments.
Doerflinger is director of OMES, which issues the monthly GRF reports.
Major tax categories in April contributed the following amounts to the GRF:
- Total income tax collections of $360.3 million were $87.5 million, or 19.5 percent, below the estimate and $10 million, or 2.7 percent, below the prior year.
Individual income tax collections of $315.9 million were $84.7 million, or 21.1 percent, below the estimate and $1.9 million, or 0.6 percent, below the prior year.
Corporate income tax collections of $44.4 million were $2.8 million, or 5.9 percent, below the estimate and $8.1 million, or 15.5 percent, below the prior year. April collections mark the first time in seven months that corporate income tax collections contributed to the GRF.
- Sales tax collections of $162.9 million were $31,000, or 0.01 percent, above the estimate and $3.6 million, or 2.3 percent, above the prior year.
- Gross production tax collections of $14.3 million were $1.4 million, or 11.1 percent, above the estimate and $7.8 million, or 118.9 percent, above the prior year.
Natural gas collections of $12 million were $489,000, or 3.9 percent, below the estimate and $5.8 million, or 91.3 percent, above the prior year.Oil collections of $2.2 million were $1.9 million, or 614.2 percent, above the estimate and $2 million, or 897.5 percent, above the prior year.
- Motor vehicle tax collections of $16.3 million were $1.2 million, or 7 percent, below the estimate and $292,000, or 1.8 percent, below the prior year.
- Other revenue collections of $58.1 million were $3 million, or 4.9 percent, below the estimate and $205,000, or 0.4 percent, below the prior year.
Revenue tables can be viewed on the OMES website: https://www.ok.gov/OSF/News/April_2017_Financial_Report_Data_Tables.html.
Be the first to comment on "April GRF receipts nearly 13% below monthly estimate"