Oklahoma's revenue collections continued to rise last month in spite of declining crude oil and natural gas prices, the state treasurer said Tuesday.
Treasurer Ken Miller said revenue collections in May were up 5.8 percent compared to the previous May. The average growth over the past 12 months has been 9.2 percent per month.
Miller said the revenue increase was driven primarily by income and sales taxes. Income tax collections have shown double-digit increases from the same time the previous year in nine of the past 12 months, while sale tax collections have averaged 8 percent growth, he said.
"With incomes climbing and sales tax collections on the rise, Oklahomans continue to show confidence in the economy in spite of renewed global uncertainty and a pullback in U.S. job growth," Miller said.
But collections from gross production taxes on oil and natural gas were less than the same month last year for a sixth consecutive month and the seventh time in the past eight months.
Miller said the percentage of total gross production taxes generated by natural gas production has fallen since last year. In October, 51 percent of gross production collections came from natural gas production, but it had dropped to 32 percent by April. The proportion of the tax produced by natural gas in May is not yet available.
Gross production collections in May reflect prices and production from March, when the spot price for natural gas at the Henry Hub in Louisiana, considered a benchmark for gas prices, averaged $2.06 per thousand cubic feet. April prices dropped to an average of $2.01, but May prices rose to an average of $2.51.
The price of crude oil also has been dropping. From late February until the end of April, the spot price of West Texas Intermediate Crude Oil at Cushing stayed above $100 per barrel. In May, crude prices dropped throughout the month and closed May 31 at $86.53 per barrel.
Gross production taxes on oil and natural gas generated $63.1 million in May, $32.5 million or 34 percent less than in May 2011. Active natural gas rigs have dropped from 122 last year to 53 this year, but active oil rigs have climbed from 48 last year to 139 currently.
"In the coming months, we will be keeping a close watch on natural gas and crude oil prices and any potential spillover effect on the Oklahoma economy," Miller said.
Gross collections in May were $858.9 million, up $46.7 million from May 2011. Gross income tax collections, a combination of personal and corporate income taxes, generated $268.5 million, an increase of $35.2 million or 15.1 percent from May 2011. Sales tax collections, including remittances on behalf of cities and counties, totaled $335.5 million in May, an increase of $21.6 million or 6.9 percent.
In spite of declining energy prices, Miller said the state's economy and state revenue continue to grow. Since revenue collections bottomed out from the recession in February 2010, 12-month collections have increased by $1.63 billion and are now only $289 million below the revenue peak in December 2008.
"At 5.0 percent, the April unemployment rate for Oklahoma is more than 3 percentage points lower than the national rate," Miller said. "Oklahoma City's rate of 4.0 percent is the lowest of the nation's 49 largest cities and speaks to the strength of the rebounding economy."