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Municipal Revenue Continues To Decline Throughout Oklahoma

Road construction continues on NW 164th Street between May and Portland avenues in Oklahoma City.
Brent Fuchs
/
The Journal Record
Road construction continues on NW 164th Street between May and Portland avenues in Oklahoma City.

Oklahoma City is preparing for midyear budget cuts because of low sales tax revenue.

Mayor Mick Cornett and city councilmembers had been hoping for growth in the sales tax, but revenue to the city is down 4 percent.

Weak consumer spending means the city will have to cut back on its own spending by about $10 million halfway through the fiscal year.

City leaders expect to cut $7 million from the budget and from capital improvements. They’ll make up the difference by drawing down contingency funds. Much of the savings will come from keeping a hiring freeze in place and not filling vacant positions, The Journal Record’s Brian Brus reports:

“With the change we’ve seen so far, we felt that we wanted to get ahead of this rather than wait too late in the game to make an adjustment,” [Finance Director Craig Freeman] said. According to the Oklahoma Tax Commission, Oklahoma City isn’t alone in its struggles. The October distribution of $136 million in August sales tax collections by the Oklahoma Tax Commission was a decrease of $3.56 million from the same period a year earlier, or a 2.5-percent drop for local governments overall. Tulsa has also seen slower growth than expected, but not to the point that Finance Director Mike Kier feels a midyear adjustment is needed, City Hall spokeswoman Kim McLeod said. The budget estimate for the year to date was down just 1 percent. “Tulsa’s lower sales tax collections mirror what is happening throughout Oklahoma, as the state has reported 19 consecutive months of revenue declines,” Mayor Dewey F. Bartlett Jr. said. “We are falling behind our budget estimate, with decreases from one year ago in eight of the past nine months.”

Oklahoma City’s targeted savings will come from $4.5 million worth of budget cuts, $3.5 million in contingency funds, and $2 million in facility and information technology improvements. The new balance then goes before the city council, Brus reports:

It’s too early to say which city services will show the greatest impact, he said. Much of the savings will be achieved by maintaining the city’s hiring freeze and not refilling positions, [Freeman] said. Sales tax makes up at least 50 percent of general fund revenue for municipalities in Oklahoma.

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