(Reuters) - Oklahoma’s general revenue fund receipts were $175.9 million below estimates for fiscal year 2017, undercut by lower-than-projected corporate income tax returns, the state’s Office of Management and Enterprise Services (OMES) said on Thursday.
The fund took in $5.04 billion for the fiscal year ended in June, compared with a projected $5.22 billion in revenue, according to the government’s website.
Corporate income tax returns were $165.7 million below their fiscal year estimate, a 55.9 percent shortfall, the OMES said in a statement.
“This just goes to underscore that you can’t rely on corporate income tax collections, and having to factor in the instability they bring actually harms state agencies and services they provide by adding unpredictability to the budgeting process,” Preston Doerflinger, the secretary of finance and director of the OMES, said in the statement.
In February, OMES cut general revenue allocations by 0.7 percent across the board to maintain a balanced budget and lower the possibility of further cuts later in the fiscal year, according to the statement.
Fitch Ratings downgraded Oklahoma’s general obligation bonds to AA from AA-plus on July 11, citing a decrease in “financial resilience” over the last several years as the state struggles to deal with changes in the energy markets.
The yield on Oklahoma 10-year GO bonds traded 20 basis points over the benchmark Thomson Reuters Municipal Market Data triple-A yield scale on Thursday.
Reporting by Stephanie Kelly; Editing by Daniel Bases and Leslie Adler