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Oklahoma revenues battered by low energy prices in 2016

(Reuters) - Gross receipts collected during 2016 by Oklahoma’s Treasury shrank 7.4 percent from the prior year as weak oil and natural gas prices weighed on the state’s finances, officials said on Friday.

Last year’s revenue of $10.78 billion was the lowest 12-month total since January 2012. Like other states dependent on energy tax revenues, Oklahoma is struggling amid sustained low oil and gas prices, which contribute to a state unemployment rate that is higher than the national average.

“Gross receipts to the Treasury show the ongoing impact of the prolonged downturn in the energy industry on all four major revenue streams,” state Treasurer Ken Miller said.

Those revenue streams include oil and gas production, income, sales and motor vehicle taxes.

“However, the overall rate of decline has slowed during each of the past three months as oil and gas gross production collections have shown moderate increases,” Miller said.

For a third consecutive month, collections from oil and gas production taxes were higher in December than the same month of the prior year. December gross production receipts total $39.4 million, up 4.4 percent from December 2015.

U.S. crude prices hovered near 18-month highs on Friday after closing at $53.99 a barrel on the New York Mercantile Exchange.

Last month, local media said Oklahoma’s budget deficit was set to come in at $868 million this year, higher than previous estimates due to low oil prices, tax cuts and corporate tax credits.

In 2014, the collapse of oil prices contributed to a massive $1.3 billion budget deficit, which led the state to declare “revenue failure” in 2015, which triggered automatic across-the-board spending cuts.

The Republican-controlled state legislature earlier this year passed a series of reforms backed by Governor Mary Fallin to Oklahoma’s bulging prison system aimed at reducing costs, but balked at her proposal to approve a new tobacco tax and other revenue-raising proposals.

Reporting by Rory Carroll; Editing by Leslie Adler