Oil, gas losses lead to another slip in state’s gross receipts

  • Oil, gas losses lead to another slip in state’s gross receipts

OKLAHOMA CITY – Gross receipts to the state Treasury slipped by 4.6% in August, with oil and gas production taxes the primary driver, State Treasurer Randy McDaniel announced.

August receipts from all sources totaled $979.5 million and were below collections from August 2019 by $47.3 million.

It marked the fifth time since February, the start of the national recession, that total receipts have been less than those of the prior year, McDaniel said.

Collections from the gross production tax, the state’s severance tax on oil and natural gas, fell by 46.3%, generating $40.7 million – $35.1 million less than a year ago. Monthly gross production receipts have been less than the same month of the prior year for 12 consecutive months, ledgers show.

August oil and gas receipts reflect production activity during June, when West Texas Intermediate crude oil averaged $38.11 per barrel. Prices rose to $42.34 in August, but drilling activity and energy-related employment have continued to drop. July reports showed 34,100 oil field employees in Oklahoma, down by 14,400 over the year. Rigs counts were set at 11 in August, a sharp reduction from 80 rigs last August.

“The gross receipts report provides evidence of the challenges facing Oklahoma’s anchor industry,” McDaniel said. “Oil and gas tax receipts have dropped by more than $430 million during the past year. We will likely see a growing ripple effect into other sectors of the economy.”

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

In addition to gross production collections, receipts from the state sales tax and motor vehicle taxes were below those of August 2019 by 4.4% and 8.2% respectively. Sales tax collections totaled $401 million, a decrease of $18.5 million, and motor vehicle taxes produced $64.2 million, down by $5.7 million.

Gross income tax receipts rose by 4.8% and use taxes paid on out-of-state purchases increased by 2% in August compared to the prior year.

Cumulative gross receipts from the past 12 months total $13.27 billion, down by $455.8 million, from the trailing 12-month period. All major revenue sources except for corporate income tax and use tax are less than those of the previous 12 months, McDaniel said.