Upload
richard-freeman
View
222
Download
0
Tags:
Embed Size (px)
Citation preview
77% of all Oklahomans live in municipalities
91% of STATE sales tax is generated from sales within
municipalities
80% of Oklahoma citizens & businesses receive water from
municipal sources
Virtually all commerce, government, education & healthcare occurs inside a city
Cities are the Economic Engine for the State
Number of Municipalities by Size
Oklahoma has 585 municipalities
319 have population under 1,000
200 have population between 1,000 & 5,000
58 have population between 5,000 & 50,000
5 have population between 50,000 & 100,000
3 have population over 100,000
Major Sources of Operating Revenue
STATE - 5
Income Tax
Sales Taxes
Gross Production Taxes
Motor Vehicle Taxes
Misc. Taxes
COUNTY - 3
Ad Valorem
State Apportionment
Sales Tax
SCHOOL DISTRICT - 3
Ad Valorem
State Appropriation
Federal Appropriation
MUNICIPALITY - 1
Sales Tax
6 states provide 3 sources of revenue from appropriations, ad valorem, income tax and sales tax
27 states provide 2 sources of revenue
17 states provide only 1 source of revenue
How Do Other States Fund Municipalities?
Sources of Oklahoma Municipal Revenue
Sales and use tax, 53%
Property tax, 8%
Other taxes, 7%
Federal and state
earmarked 12%
Charges for services,
15%
Other revenue, 6%
Compare US vs. Oklahoma
Other Taxes, 11%
Fees/Charges
7%
Sales Tax, 11%Income Tax, 14%
State Funds, 15%
Federal Funds, 6%
Property Tax, 28%
All Other Revenues, 8%
US Municipal Revenue Sources
Sales and use tax, 53%
Property tax, 8%
Federal and state
earmarked, 12%
Other taxes, 7%
Charges for services,
15%
Other revenue, 6%
Okla. Municipal Revenue Sources
In Search of the Big Box
For fiscal survival, municipalities are forced to pursue retail sales over jobs or rooftops
New jobs generate income tax
New rooftops, after construction, generate only ad valorem tax
The “Wal-Mart” Effect
Sales Tax Revenue Per Person Per PennyMakes comparisons possible regardless of
size of city or rate of tax
The average PPPP in a Wal-Mart City is $139
The average in a non Wal-Mart is $72
Do retail sales generate NEW revenue?
When Glenpool adds a Wal-Mart, where do the shoppers come from? Drains revenue from one locality to
benefit another, or Shifts revenue from one retailer to
another within the same locality
Pursuit of retail sales has limited benefit for the state
.
Problems with relying solely on Sales Tax
Sales tax is a volatile source of revenue
Consumer switch to Internet sales Loss to Oklahoma municipalities
projected to be $106 mil. annually by 2010
State and counties crowd out the ability for cities to increase sales tax
Not Every Transaction Generates Sales Tax
Number of City & State Exemptions
6
69 70
100108
139 142 143
0
20
40
60
80
100
120
140
160
1980 1981 1990 2000 2002 2007 2008 2009
Inside City Hall Voter-approved sales tax is often
dedicated to a specific purpose
City Portion Dedicated General Fund
Broken Arrow 1.5% 1.5%
Claremore 3.0% 0%
Collinsville 1.0% 2.0%
Jenks 1.0% 2.0%
Mannford 1.5% 2.0%
Owasso 1.0% 2.0%
Sand Springs 1.5% 2.0%
Sapulpa 2.2% 1.8%
Skiatook 1.0% 2.0%
Tulsa 1.0% 2.0%
Streets & Transit
Administration
Recreation & Culture
Economic Development
Neighborhood Planning
Public Safety
Operating Revenue (2¢)
Streets & Transit
Administration
Recreation & Culture
Economic Development
Neighborhood Planning
Public Safety
Operating Revenue (2¢)
Public Safety Consumes Most Available Sales Tax Revenue
POLICE/FIRE % OF OPERATING FUND
90.7%
118.7%111.0%
187.5%
160.5%
88.4%
158.8%174.0%
101.0%
0%20%40%60%80%
100%120%140%160%180%200%
Municipal Street Funding
Municipal Roads Vital to Economic Development 54% of miles driven in Oklahoma are
driven on municipal streets Motor Vehicle Apportionments
Municipalities $24 mil. statewide Counties $235 mil. statewide
Transfers
in (normally utilities),
16%
Proceeds from long-
term borrowing,
1%
General revenues,
84%
How to balance the city budget?
Consequences Robbing utility revenues means:
Systems go without maintenance
54% of Oklahoma’s Water Treatment Facilities are under DEQ consent order.Compare 4% in Kansas
EPA estimates $5.4 billion to bring municipal water and sewer up to standard statewide
Higher Utility rates for customers
First Do No Harm Learn the cost of new state mandates
placed on cities prior to passage CTAG will request a bill requiring
Municipal Fiscal Impact Statements No more sales tax exemptions that
don’t pay for themselves Fully fund Disaster Relief obligation
each year
Healthy Cities Healthy OklahomaRemedies
HEALTHY CITIES HEALTHY OKLAHOMA
Remedies
Consider the solutions Diversify the tax base, giving access to ad
valorem for operations Municipal Fire Districts
Increase motor vehicle apportionment Repeal sales tax exemptions that don’t
provide a benefit Return to cities a portion of the state sales
tax generated in its area Half-cent for roads
Proposals for Next Session
No unfunded mandates
Require municipal fiscal impact statements on legislation
Proposals for Next Session
Office of Emergency Management reporting
Require semi-annual report to legislature on outstanding payments to municipalities
Proposals for Next Session
Allow counties to help once again Remove population
limitations on county’s ability to assist with street building and repair
Proposals for Next Session
Expand retail opportunities
Allow municipal public trusts to participate in retail operations