(Adds North Dakota, background)
By Megan Davies
NEW YORK, Dec 5 (Reuters) - Oklahoma’s energy-related revenues are feeling the squeeze from lower oil prices and if the price remains low, it could hit income and sales tax revenues if energy workers have less money to spend, the state’s treasurer said on Friday.
Lower oil prices are expected to boost some states’ sales revenues, as they give people more discretionary spending power. That is tempered by the impact lower prices have on energy-focused states.
“We are beginning to see the signs of softening prices, but we’ve not yet seen the impact of these extremely low prices of below $70. That will take a few months to get in,” Ken Miller, Oklahoma state treasurer, said on the sidelines of the National Association of State Treasurers’ conference in New York City.
It is a contrast to North Dakota, benefiting from an energy boom, which is forecasting rebounding oil prices and a 23 percent jump in oil taxes.
Oklahoma’s monthly numbers for November show the first year-on-year decline in energy tax revenues for the state in 19 months although overall state revenues remained healthy.
Collections from its gross production tax on oil and natural gas slipped below prior year collections in November, down 5.3 percent year-on-year, Miller’s office said. It was the first monthly year-on-year decrease since April 2013. Still, personal income and sales taxes were healthy.
“Our concern is that if (oil prices) stay low is that we eventually see that spill over into our other revenue sources: personal income tax, consumption tax, motor vehicle taxes,” said Miller. “We do have a large part of our economy that is tied directly or indirectly to energy.”
Oil prices have fallen more than a third since June.
Oklahoma headquarters a number of energy companies including Continental Resources Inc, Sandridge Energy Inc and Chesapeake Energy Corp. In the state, energy companies continue to extract oil from traditional reserves and also are tapping unconventional shale fields using the process known as “fracking.”
Miller said Oklahoma does not rely heavily on extraction taxes, which make up about 5 or 6 percent of its general revenue fund.
“We will definitely feel the affect of lower prices. Fortunately for us it’s not a high percentage of our general revenue fund,” he said.
Reporting by Megan Davies; Editing by David Gregorio and Lisa Shumaker