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January Collections Miss Estimate by More Than $50 Million

It appears the downturn in the U.S. economy has found its way to Oklahoma, State Treasurer Scott Meacham announced today.
Oklahoma's General Revenue Fund collections dropped significantly below prior year collections and the estimate in the month of January.

Preliminary reports show General Revenue Fund collections for January totaled $492.8 million. That amount is:

* $45.5 million or 8.5 percent below the prior year; and
* $50.8 million or 9.3 percent below the estimate.

"It would appear that Oklahoma is increasingly seeing the effects of the
nationwide recession," said Meacham. "This is the first time in nine months that monthly collections have been lower than both the previous year and the estimate."

In spite of the reduction in collections, Meacham said it appears the state is positioned to finish the fiscal year with sufficient revenue to meet the state's financial obligations.

"Year-to-date collections are more than $150 million above the estimate," he said. "With this $150 million and the five percent
constitutional cushion between the revenue estimate and actual expenditure authority, it still appears we will have sufficient revenue to cover state appropriations through the end of the fiscal year in
June."

Meacham said, as expected, gross production tax collections showed significant drop off in January.

"The effect of sharply lower oil and gas prices began to be felt in January," he said. "Gross production collections dropped by almost two-thirds in one month - from $98.7 million in December to $35.2 million in January."

Meacham said he continues to be concerned by falling personal income tax collections.

"Since November, we've seen a downward trend in withholding tax collections as Oklahoma employers have reduced their payrolls. This
month, withholding was down by almost $9 million from last January," he said.

Sales tax was the only major tax category to show growth, Meacham said.

"If there is bright spot in Oklahoma's economic picture, it would be that consumers are still spending at a healthy pace," he said. "Sales tax collections are up by 7.6 percent from last January. Oklahomans are
continuing to spend money."

Net income taxes, a combination of personal and corporate income tax collections, produced $244.8 million in January, which is $14.5 million or 5.6 percent below the prior year and $9 million or 3.5 percent below
the estimate.

Personal income tax collections for the month totaled $221.6 million, which is $28.3 million or 11.3 percent below the prior year and $17.6 million or 7.4 percent below the estimate. Corporate collections totaled
$23.2 million, which is $13.8 million or 148 percent above the prior year and $8.7 million or 59.9 percent above the estimate.

The gross production tax on oil and natural gas yielded $35.2 million for the month, which is $16 million or 31.2 percent below the prior year and $24.4 million or 40.9 percent below the estimate.

The state sales tax produced $148 million for the month, which is $10.5 million or 7.6 percent above the prior year and $0.7 million or 0.4 percent above the estimate.

Motor vehicle collections for the month were $9.7 million, which is $12.8 million or 57.1 percent below the prior year and $11.6 million or 54.5 percent below the estimate.

Other revenue, which includes investment earnings along with taxes on insurance, alcoholic beverages and others, produced $55.1 million for the month of December. This is $12.8 million or 18.8 percent below the prior year and $6.6 million or 10.7 percent below the estimate. This category was impacted by a $12.5 million deduction for the Oklahoma's Promise tuition payment program - the third of three such deductions
this fiscal year.

The treasurer's investment earnings for January were $12.7 million, which is $1.4 million or 10.1 percent below the prior year.

Year-to-date collections for the first seven months of the fiscal year continue on the positive side at $3.6 billion. This is $191.8 million or 5.7 percent above the prior year and $151.2 million or 4.4 percent above the estimate.