Six-month tax collections beat estimate
Tuesday, January 13th 2004, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ State tax collections for the first half of the fiscal year beat the official state estimate by 3.4%, or $73.1-million, a report showed Tuesday.
Increased sales tax and income tax collections in December and over the past six months are causing optimism at the Capitol that the economy will continue to shore up the state budget.
The biggest increase has been in the state tax on natural gas _ up 68% over the prior year and almost 42% over the estimate.
Total tax collections are up $242-million, or 12% from a year ago, according to the report from the Office of State Finance.
``I'm pleased the economy is moving in the right direction,'' said Gov. Brad Henry, while adding that he would be happier if companies were hiring more people.
He said economists are ``still a little bit nervous'' that a sudden shock could blunt the upswing both in Oklahoma and nationally.
Therefore, he said his administration would use a cautions approach to writing next year's budget.
The OSF report was good news because the state had its worse budget shortfall in history last year, Henry's first as governor, forcing deep agency cuts.
Scott Meacham, OSF director, said he is confident no budget cuts will be necessary during the current fiscal year, which ends June 30.
Meacham was upbeat over the sales tax performance, pointing out that collections were up $40-million over a year ago and $16.4-million over the estimate.
He said he thought the numbers would improve when final December collections are in, reflecting the second half of the holiday shopping season. Current collections count sales only through Dec. 15.
``According to various reports, the real strength of the holiday season was seen in the final days leading up to Christmas,'' Meacham said.
He said income tax collections will begin coming in lower in the months ahead because the state's maximum individual income tax rate was reduced from 7% to 6.65%. That will reduce collections by an estimated $16 million.
So far, combined individual and corporate income taxes have exceeded last year's collections by $92.8 million, or 10%, but are below the estimate by $8.7 million, or 0.8%.
Receipts from motor vehicle sales are up 6.3% from a year ago.