EDMOND —
The good news: One month does not make a trend. Plus, the overall data was somewhat mixed. However, the latest state revenue report released by the Oklahoma Office of Management and Enterprise Services indicates that dark clouds might be forming on the horizon of the Oklahoma economy.
This past week the newly named OMES (formerly Office of State Finance) reported that in August, state General Revenue fund collections totaled $386 million — which was 6.8 percent below the collections from August 2011 and 4.8 percent below the official estimate. The decline was driven mainly by continued weakness in gross production tax receipts and an 11.0 percent decline in income tax collections. While the weakness in gross production tax collections has been evident for some time, the sharp drop in income tax collections last month caught me off guard.
On a brighter note though, it is important to remember that income tax collections are highly volatile (which is why I look at an average of several months), so this month’s reading could just be an aberration. If we look at the past six months, income tax collections have shown surprising strength, given the general weakness in the national economy. However, the fact that natural gas prices remain low (despite somewhat of an improvement over the summer) still is a cause for concern.
Even more significant on the positive side is the continued strength in the most reliable indicator of state economic activity — seasonally-adjusted sales tax collections. I favor this metric over others because 1) it is timely and 2) it is relatively stable from month to month. Unlike many economic indicators, especially at the state level, the state government releases sales tax collection figures monthly with only a slight delay. And sales tax collections are much less volatile than income tax collections making sales tax collections a much more useful economic indicator. My own estimates of seasonally adjusted sales tax collections (using the state’s official unadjusted numbers) continue to hover near $160 million per month, which is well above even the pre-recession levels. However, this figure too, is off its highs (albeit slightly) from a few months ago.
The best indication right now, based on the continued strength in the most-reliable indicator, is that the Oklahoma economy remains strong. But this latest report does raise some concerns that we might be slowing (perhaps significantly so). So in many ways, this report raises more questions than answers. For example, as dependent as Oklahoma’s economy is on the energy industry, how much longer can we see simultaneous weakness in natural gas prices and strength in the Oklahoma economy? Was this month’s sharp decline in income tax collections an aberration or a precursor to overall weakness? How much longer can the Oklahoma economy continue to march along without being slowed by national economic conditions?
These are all important questions we’ll be better able to answer in the coming months. Considering that overall tax collections have yet to rebound to pre-recession levels, another slowdown could be disastrous for the state’s ability to invest in education, to care for our children, to support our economy and to protect our families. Each of these functions improves the quality of life for Oklahomans and makes this state a more attractive place to conduct business. And the provision of these needed government services has been placed under great strain in recent years as the state recovered from the Great Recession. A longer, more robust recovery is needed to help enable Oklahoma’s government to ensure our future prosperity.
In short, the stakes are higher now because tax collections are lower.
MICKEY HEPNER is the dean of the College of Business Administration at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.
Opinion
Oklahoma needs more robust recovery
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Seeing yourself as the world sees you
Ever try seeing yourself as others see you, or your piece of the world as others see your piece of the world?
You know, if you could get others to see you, or if you could get other parts of the world to see your part of it?
Narcissism and inferiority, both, can trap us in front of a mirror, admiring or lamenting, pleased or not pleased by the vision we presumably offer others.
Yet, what’s happened over the last three days, since yet another deadly tornado rolled through Moore, offers an entirely different perspective.
Through strength or weakness, we may take an interest in how we project. But when the “Today Show” is broadcast from the rubble and the network evening news has placed its anchor amidst the carnage; and when the news channels descend upon the destruction and every newspaper in the country is playing your and your neighbors’ plight bigger than its own hometown news, it turns surreal. -
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That conflict pitted the British Army against the descendants of the Dutch settlers who had migrated to what is now South Africa in the 17th and 18th centuries. The majority of them were farmers and in their language of Afrikaans were known as “Boers.” -
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May is graduation season. As I have done every year as lieutenant governor, I have given multiple commencement speeches. Advice flows freely during this time and it usually runs the gamut. What to do, what not to do, how to do ‘x’, be sure not to do ‘y.’ Too often commencement speakers speak in big generalities. So general, the message is frequently lost or forgotten.
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Last-minute funding proposals not in state’s best interest
All indications point to this being the last week of this year’s legislative session. The Legislature will go home a week early. This is good news for Oklahomans as not only will there be cost savings but all Oklahomans should breathe a sigh of relief when the Legislature stops making new laws a week ahead of schedule.
As usual, the Legislature will take a number of important votes during the last week. Some will be forced due to attempts to introduce and pass far-reaching, new policies that should have been introduced much earlier in the year. -
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After six months of stagnation, the Oklahoma economy finally appears to be expanding again albeit still weakly. Unfortunately, our leaders aren’t making the investments we need to give our economic prospects a boost.
Last week the Oklahoma Office of Management and Enterprise Services reported that in April state General Revenue fund collections were 5.2 percent above the estimate and 14.7 percent higher than last year’s collections. Under normal circumstances, such a report would indicate that the Oklahoma economy was very strong. But this isn’t a normal circumstance, and April isn’t a normal month. -
Americans deserve the truth on Benghazi
Lately, the media has been consumed by the controversies surrounding the White House. Among these controversies is the horrific terrorist attack on the United States’ diplomatic compound in Benghazi that took place Sept. 11, 2012. As more people come forward with additional information regarding the attack on the consulate, many Americans, including myself, are still asking for the truth.
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Recent headlines cause me to remember an incident that occurred on an army base some years ago. Warning here: I’m taking some liberties with names and details, but the basic outline of events is accurate.
A certain company commander, let’s call him Captain Duntz, had command of a motor pool on a large army base in the continental U.S. -
We’ve become our own worst enemies
The past couple months have been marked by a seeming unprecedented number of man-made tragedies, as distinct from those caused by violent outbursts of the natural world, such as earthquakes, hurricanes and tsunamis.
You don’t want to dwell too long on the negative, but we do have to take notice of horrific human events and we owe it to ourselves to respond to them in some way. We don’t always agree on those responses, however, and that usually exacerbates the problem. - More Opinion Headlines
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Seeing yourself as the world sees you
