The most recent sales tax report for the City of Tulsa reveals that the economy is not recovering as fast as Mayor Kathy Taylor budget projections. The numbers vindicate Councilor Bill Martinson's prediction that the Mayor's numbers were overly optimistic and would leave the incoming mayor and council with difficult budget choices.
The latest information on monthly revenues, including sales and use tax deposits and utility franchise receipts, suggests the Tulsa economy is recovering at an even slower pace than predicted.
Sales tax collections reported in October for September collections totaled $16,201,499, which is $831,501 below estimate for October.
Use tax receipts for October totaled $1,105,924, which is $395,076 lower than projections.
While we took serious action in the most recent budget by eliminating 96 positions citywide, and decreasing sales tax expenditures by more than $10 million, information from this month’s reports indicate an even more significant decline in sales tax than projected. The revenues for the first quarter of this fiscal year were close to budget. However, the significant decline in the most recent month reported triggers additional action. We are revising our sales tax revenue projections downward by another $3 million for FY 10. This decrease in sales tax is accompanied by a $3 million decrease in the projections for other major revenue categories, including use tax and utility franchise receipts, for a total $6 million revision in revenue projections for the remainder of the year.
As you know, Tulsa is reflective of national economic trends. In relation to the national economic climate, the City of Tulsa is faring better than many parts of the country – with a lower unemployment rate (7.1 percent vs. national 9.8 percent), and a 2008 foreclosure rate of 1.22 percent, compared with 1.84 percent nationally. Other Oklahoma cities are experiencing similar economic trends to Tulsa, prompting further budget revisions and further expenditure reductions.
The City of Tulsa’s spending has remained conservative, but revenue declines will require a further reduction in expenses. Our finance team will gather detailed data and meet with the management team next week to review previously identified budget reductions, and develop a plan for rapid implementation of further cuts. We will keep you advised.
