OKLAHOMA CITY (AP) — Oklahoma reported modest increases in tax revenue from oil and gas production over the past two months, although those collections fell short of last year’s marks.
The state is going through a continued economic downturn as gross tax receipts for June were $925.7 million, or 7.4 percent lower than the June 2015 total, Oklahoma State Treasurer Ken Miller said Wednesday. The state entered a recession in the spring of 2015 and that continued at least through the end of the year, Miller said.
“There’s nothing to show marked improvement or a recovery in the energy sector, which means the state’s going to continue to have its budget problems in the near term,” Miller said. “But hopefully, the numbers show moderation and that the worst is behind us.”
The treasurer’s report said one June survey of supply managers suggested economic contraction is expected to continue during the next three to six months, a worse outlook than was estimated in May.
An oil and gas production advocacy group said Tuesday that the state could be near the end of its downturn, citing recent increases in crude oil prices and improving investor sentiment toward the Oklahoma energy sector. The Oklahoma Independent Petroleum Association combined those and other indicators into an Oklahoma energy sector index, which held steady in May despite declining rig activity in the state.
“The underlying trend in the index is consistent with a developing bottom to this cycle, but significant concerns still exist,” said Russell Evans, executive director of the Economic Research and Policy Institute at Oklahoma City University.
Oklahoma’s monthly unemployment rate rose in May to match the national rate at 4.7 percent. The state had posted better employment numbers than the national average each month since 2003.
The Legislature faced a $1.3 billion shortfall this year when assembling the state budget, a result of declining revenues officials have linked primarily to fluctuations in the state’s once-vibrant energy sector. Miller said it’s too early to know whether the economy will improve enough to avoid a similar revenue gap in next year’s budget. Figures the treasury released Wednesday were indicative of a broader economic outlook, not general revenue collections.
“Hopefully we hit bottom and the numbers won’t go back there,” Miller said. “If that’s the case, I think that we won’t see the budget gap next year that we saw this year.”
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