- Associated Press - Friday, August 5, 2016

OKLAHOMA CITY (AP) - Oklahoma’s tax collections were down for the 17th month in a row during July - largely due to depressed energy prices and ill-timed tax cuts - extending a losing streak that’s lasted longer than the nation’s Great Recession.

State Treasurer Ken Miller said Friday that Oklahoma took in $854 million last month, $88 million less than it collected in July 2015. The decline was evident in every category, including individual and corporate income taxes, sales taxes and revenue from the production of oil and natural gas.

While several energy-rich states have seen tax receipts fall, Oklahoma exacerbated its situation by moving forward with income tax cuts approved when times were good.

Erica Williams, deputy director of state fiscal research for the Center on Budget and Policy Priorities, a nonpartisan research and policy institute in Washington, D.C., said Oklahoma and other states like it - particularly Louisiana and West Virginia - are in a “much more vulnerable position.”

“The driving issue seems to be that some states have prioritized tax cuts over maintaining the revenue that they need to maintain investments,” Williams said. “If states hadn’t done the tax cutting they did, they may not even have shortfalls.”

Last month, Oklahoma collected $30.5 million in taxes on oil and gas production, off $10.5 million from a year earlier.

Tax cuts granted to the oil and gas industry over the past decade will cost Oklahoma $350 million this year, according to Williams’ organization. Over that same time, lawmakers have cut the top income tax rate from 6.65 percent to 5 percent at a cost of over $1 billion a year, it said.

Gov. Mary Fallin opposed attempts to delay or roll back the income tax cuts because of the energy slump. In the closing days of their 2016 session in May, legislators had to address what was expected to be a $1.3 billion shortfall. They accounted for $970 million and told agencies to tighten their belts.

Every month since March 2015 has been the same for Oklahoma - monthly revenue reports showing a drop from the previous year. One has to go back to February 2015 to find a month in which revenues went up - nearly 1½ years ago.

The Great Recession prompted 14 months of declines.

Miller said the current decline isn’t as steep. Since February 2015, 12-month collections have fallen by $1.1 billion. During the Great Recession, 12-month gross receipts shrank by $1.9 billion from December 2008 through February 2010.

“Though we are still looking for the bottom of the current economic contraction, the news is not all dire,” Miller said.

On Wednesday, the state Department of Human Services, which administers the state’s foster care program and provides services to vulnerable children, the elderly and persons with developmental disabilities, revealed plans to cut $45 million from its budget due to cuts to state agency budgets that are part of a $6.8 billion state budget for the fiscal year that began July 1.

The Center on Budget and Policy Priorities said Louisiana and West Virginia were also hit hard by declining oil and natural gas prices and also faced budget shortfalls. Louisiana lawmakers have repealed income tax increases in recent years that cost about $800 million a year, it said. In addition, the cost of a handful of business tax incentives has ballooned to about $1 billion a year.

In West Virginia, a variety of taxes have been cut in recent years, including a cut in corporate income taxes and new tax breaks for businesses, at a combined cost of $415 million a year, the organization said.

Copyright © 2018 The Washington Times, LLC.

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