OKLAHOMA CITY — Oklahoma’s tax collections increased by almost 13% over last year, a new report from the State Treasurer’s Office shows.
The increase, up 12. 9% from the same period in 2022, was driven primarily by receipts from oil and gas production, State Treasurer Todd Russ said. Russ said collections for the past year were $17.62 billion, a $2 billion increase from the $15.61 billion collected in 2022.
“While inflation remains a major concern, Oklahoma’s economy is benefiting from strong energy prices and low unemployment,” Russ said in a media statement announcing the new data. “In addition, economic activity in the state continues to be robust as reflected in sales and use tax receipts.”
Records show February tax receipts, which totaled $1.21 billion, were up 13.4% from February 2022. Russ said Oklahoma set a new record with $528.3 million collected in sales and use tax revenues.
Along with sales and use tax, corporate tax collections increased by $113.3 million to $1 billion while individual income tax collections increased by $609.8 million – a 13.6% increase – to $5.1 billion.
Taxes for motor vehicles were up slightly at $883.4 million – a $1.7 million increase.
Along with the record-setting tax revenue, the state’s unemployment rate remains low, at 3.1%. Nationwide, the jobless rate stands at 3.4% in January, a decrease of one-tenth of a percentage point from December 2022.
Most economists consider an unemployment rate of 5% or less to be full employment – a ranking that signifies all available labor resources are being used in the most efficient way possible.
Russ’ data underscores a new report released by the Greater Oklahoma City Chamber of Commerce, which says the Oklahoma City area – which accounts for 41% of the state’s total gross domestic product, or $4 out of every $10 in goods and services – should continue to reflect positive growth deplete a slower national economy.
The chamber’s report also shows the Oklahoma City area’s unemployment rate of 2.9% – two-tenths of a percentage point lower than the statewide average.
“The total labor force, driven by population and migration gains, was the largest in history with more than 710,000. Oklahoma City finished out the year ranked among the top 10 lowest unemployment rates for large metros (over 1 million population),” the report said.
Still, while the Oklahoma City area and the state’s economic outlook remains robust, some indicators still remain less than positive. According to the chamber, the Oklahoma City metro area reported 5,213 housing starts in 2022 – a 21% decrease from the previous year but close to the pre-pandemic level of 5,366, recorded in 2019.
In addition, borrowing costs in the state continue to increase.
“After two years of record-breaking activity, the red-hot housing market has finally started to cool. More than 27,400 closed sales and 26,000 pending sales were reported,” the chamber report said. “The MLSOK (Multiple Listing Service) Annual Report showed that 2022 home prices in the Oklahoma City metro were up compared to last year. The overall median sales price increased by 11.5 percent to $242,000 for the year. Single-family home prices were up 11.4 percent compared to last year, and townhouse-condo home prices were up 14.4 percent.”
While data shows that consumer spending continues to offset weaknesses in business investment, that spending, the chamber reported, is being supported by a mix of savings and credit that is quickly eroding.
Those concerns are expected to grow, officials said. “Household net worth and savings are falling, while credit card use, and delinquencies are rising,” the chamber’s report noted. “It is increasingly unlikely that household spending will be able to keep pace with inflation through 2023.”
Nationwide, household net worth also fell over the past year. According to the chamber’s report, household net worth fell by $7 trillion, from a high of $142 trillion in late 20-21 to $135 trillion in the second quarter of 2022.
The state’s economy, the chamber reported, is still recovering but that recovery is being hindered by slowing economic activity.
“In some ways, the outlook shared here reflects a best-case scenario of slow economic progress in 2023. We expect a difficult path in securing even slow economic growth in much of 2023 and instead expect a mild recession that may offer a surprise in its depth and duration,” the chamber’s report said. “Unfortunately, the long-predicted year of real excitement is upon us.”