Health, safety and economic concerns in the age of COVID-19 are forcing municipalities across the state of Oklahoma to adapt and make some difficult decisions. KGOU's Dick Pryor and eCapitol's Shawn Ashley discussed the reality facing cities and towns with Mike Fina, executive director of the Oklahoma Municipal League.
Dick Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics, policy and government. I'm Dick Pryor with eCapitol news director Shawn Ashley. Today, we discuss how Oklahoma's cities and towns are doing in the middle of the pandemic and economic downturn with Mike Fina, executive director of the Oklahoma Municipal League. Welcome, Mike.
Mike Fina: Good to be with you.
Shawn Ashley: Mike, cities and towns get most of their operational funds through sales and use taxes. With the economy being what it is today, how are those communities doing?
Mike Fina: Yeah, it's interesting. We started watching that immediately after the COVID started to hit our municipalities, and because our collections are a month behind, we really had to get deep into it before we could start looking at that data. But, the interesting thing that we found with the first round of sales tax and use tax receipts is that if you were a community that had a large grocery store or Walmart, you were probably doing OK through that first part of it. But if you didn't, you probably weren't. I'll give you a great example of here in the metro area. Choctaw recently built a beautiful new Walmart and their sales tax were actually up from last year. But then you go right next door to Jones, and Jones was quite a ways down from the year before. And really, that's what we attributed it all. The Jones residents were running over to Choctaw to go to Walmart.
Shawn Ashley: The Oklahoma Tax Commission reported on Thursday that sales tax collections for the most recent one-month period were higher than a year ago, some nine point-two million dollars. What do you attribute that increase to?
Mike Fina: I'm making a little speculation here, but people working from home, having their kids at home had a lot to do with that. People were shopping from home that we certainly saw with the changes that we did in use tax and being on collect the internet sales tax. Amazon has been very popular through COVID, so we've seen some increases there.
Shawn Ashley: You mentioned what happened in Jones and Choctaw, perhaps. How did the business shut down in March and April due to COVID-19 affect city revenues?
Mike Fina: There were different sources. We had increases in the grocery style sales tax. But some of our mom and pop stores, there are more traditional Main Street stores that have struggled, you know, and also, I think things that go overlooked like, let's say, dance studios. Most communities throughout this state have dance studios and usually they're selling products in there. And we're missing out on some of our our traditional businesses, some of our longtime businesses on Main Street.
Dick Pryor: And Mike, community events have certainly taken a hit.
Mike Fina: Absolutely. You guys know that better than anybody in Norman and all the great festivals that you have through an event you have through the summer you didn't have this year. And most of our communities that did have their events through the COVID pandemic, they saw reduced numbers of people. So that what that relates to or turns into is just less income for that event for those communities.
Dick Pryor: The city of Tulsa is getting thirty million dollars of the state's CARES Act funding. Are municipalities getting the federal funding they need from the state?
Mike Fina: Well, that's a… Some are. Some are not. But I don't necessarily blame the state government for that, a little bit, I'll explain that. When they first rolled out the CARES Act funding procedure and then used the criteria from the Treasury Department there just wasn't a lot of things that our cities could claim because of the guidelines and a lot of the things like the PPE that was already being provided by the state. We had such a huge stockpile that we weren't making those expenses. When we did the first round of COVID reimbursements it was interesting. One of the highest category was people buying technology for their employees to work at home.
That really actually shocked me when I saw those numbers…that we just haven't had that much decline. There was a small five-day window where the state was allowing municipalities to claim public safety salary expenses. And a couple of our cities did get those in. But then they closed that off because they were worried that it was going to deplete the fund too fast. Had they allowed us to do that, that would have made a major impact and you would have seen a lot more dollars getting into municipalities. But as of now, we really haven't…we haven't even stressed that fund at this point.
Shawn Ashley: One of the discussions in Washington right now is to provide direct stimulus funding to municipalities rather than going through the state for COVID-19-related expenses? What are the chances, do you think of seeing that happen?
Mike Fina: Well, we've been right in the middle of that debate and we've met with pretty much our entire congressional delegation. We were hopeful that that would happen. But your question was, do I think that's going to happen, and no, I don't. I don't see our congressional delegation supporting that other than Kendra Horn. She was very vocal about supporting that. Our GOP members were not as much. And I believe that the municipal part of that turned into such a partisan battle on Capitol Hill. And it was the one that wasn't in the press as much as the other things, but it was behind the scenes pretty much a battle. And I'd think it's going to get left as one of the undone things, probably like the post office.
Shawn Ashley: Do you think more money might go then to the state for distribution to municipalities?
Mike Fina: At this point, I don't think they're going to put any more money into municipalities. We have for the last 90 days that has been our focus as far as, ah, lobbying or advocacy efforts. And I don't see them coming to an agreement on that. Now, I don't want to be completely unfair because there were two things that I think will get done if they actually pass the stimulus. Two items that the Democrats and Republicans agreed on. One was to allow up to twenty-five percent of the fund to be used for budget stabilization. They all seem to agree on that. And the other one was to extend the timeframe that we can use the funding. I believe those two things will happen that will help municipalities just by getting the remaining funds out there. But I don't think they'll put additional dollars in there.
Dick Pryor: The city of Norman approved less funding for the police department than it had been requesting, choosing to reallocate those funds for other community services. Are other municipalities doing that, too?
Mike Fina: I believe right now all of our municipalities, especially our large municipalities, are reevaluating their police budgets. I don't think that it's going to result in a reduction in the majority of our cities. And I don't know that it actually, you know, the Norman situation… there were a lot of other things at play in their decision making, and they really weren't trying to pull that out of the police budget, they were just trying to redistribute it into other areas of police public safety. So, I'm probably splitting hairs with what they did in Norman and I know there's a big debate there, but I believe that Norman is very much dedicated to public safety and police protection.
Dick Pryor: Elected officials have to make decisions all the time about how to allocate funds. Are cities and towns right now concerned that any moves to provide less funding for law enforcement, the police, will be framed as defunding or eliminating police departments?
Mike Fina: Oh, I think that's the concern of every sitting council member or mayor than them, the unfortunate thing is that we are going into or were in a new budget cycle that we went into at the very beginning of COVID, and they were really working off of last year's numbers, which were pretty good for municipalities. And so we had to do some creative forecasting and a lot of our municipalities to anticipate what the financial impact will be. So what that means in municipal budgets - public safety is always our largest expense in any community. So, if you're cutting budgets in a non-COVID year, you're probably cutting some police and fire money or public safety money anyways. So, I think that that's a fear that we're gonna have down budgets. We’re gonna be looking at the biggest part of our budget and you're going to have to make cuts somewhere. But then you have this added pressure of defunding the police that's going to end up on the backs of council members around the state.
Shawn Ashley: Governor Kevin Stitt has not ordered a statewide mask mandate like some other governors have. And he has said that that's up to local governments to decide. How our municipalities going about making those decisions?
Mike Fina: Well, they're not easy decisions to make. They are… if you see the council meetings where those decisions are being made and the number of people that are showing up to those meetings, these are not easy decisions. What I see our biggest cities doing, I shouldn’t even, all of our cities I believe they are making data- driven decisions. One of the things we've tried to do at OML is create really good communication with all of our cities and providing them that data. And I know that they're using data because just the communication that we have directly with with the number of municipalities around the state, that they're they're looking at the numbers. I appreciate the fact that Governor Stitt has he said it from day one “I'm going to let municipalities make the decision.” And he has not changed on that. So, I have to be very happy about that. So, I've never I've never criticized him for not doing a statewide mandate because he's never messed with our authority.
Dick Pryor: Mike, is there consensus among those in municipal government about whether schools should open for in-person teaching this fall?
Mike Fina: Those discussions are happening all the time in communities. The two, although school boards and city councils both are elected bodies and work independently, this is that one issue where it impacts both sectors and in any community. So, there's a lot of discussion about that. I don't know that there's a consensus. I don't believe that there's a statewide consensus, but there's not a national consensus on that either. It's different. If you go to Broken Arrow, one of our state’s largest cities, and you look at their numbers and you look at the size of their schools they haven't been impacted quite as much as just their neighbor there in Tulsa. So, they've made a different decision than Tulsa and their school boards made a different decision. So, it's just it's different every community that you go to.
Dick Pryor: What tends to drive their decision making? I'm talking about in cities whether their schools should open or not.
Mike Fina: I think, again, I think they're looking at the data of what's happening in that particular community. I think I believe that our, at least our city officials, are listening to what their teachers are saying as well and what that school system's capacity is to open. So, again, it goes back to that what's happening in that community and taking that data and making those decisions.
Shawn Ashley: With efforts underway nationally to disrupt the U.S. Postal Service, which is very important to a lot of small communities in Oklahoma, how concerned are you about this November's election with absentee mail-in balloting expected to play a much bigger role?
Mike Fina: I'm extremely concerned. I'm a big fan of the post office, in fact, the mayor of West Siloam Springs works for the post office down there, and we have this discussion and she's a very she's she's a very red Republican, too, but understands the impact of that. You know, we talk about defunding the police - I think we're defunding the postal department right now. It's a concern not just for the election. It's just a concern in general. I think it's a foundational item of this country that we can always point our postal service and say what a great job they do and it makes us a civilized nation and we're dismantling it, and it's actually quite disgusting as far as I'm concerned. We need to protect this part of our country.
Dick Pryor: Mike Fina, thank you for visiting with us.
Mike Fina: Thank you.
Dick Pryor: That's Mike Fina, executive director of the Oklahoma Municipal League, and that's Capitol Insider. You can hear more of this conversation at kgou.org. If you have questions, e-mail us at email@example.com or contact us on Twitter @kgounews and @eCapitol.net. Until next time with Shawn Ashley, I'm Dick Pryor.