Suburbs seek to drain what life is left from Tulsa

[sgrizzle]

http://newsok.com/article/3214290/1205128420

quote:
City, Tulsa could lose $30 million
By Michael McNutt and John Estus
Staff Writers
Oklahoma's two largest cities stand to lose nearly a collective $30 million in sales tax earnings with a measure a legislative leader calls a "Robin Hood" plan.


Rep. Steve Martin's proposal would redistribute municipal sales tax collections to help out small cities. Many of those small cities have lost independent businesses and stores, forcing residents to go to bigger cities for shopping and entertainment purposes.

Martin, R-Bartlesville, said his measure would "level the playing field" in sales tax collections by automatically taking 1 percent of each city's municipal sales tax collections and redistributing it. Generally, smaller cities would gain money while larger cities would lose money.

Oklahoma City would lose $13.4 million in annual sales tax collections and Tulsa would lose $16.1 million a year.

It's doubtful the measure will be passed into law this session. Tulsa and Oklahoma City oppose the measure.

House Majority Floor Leader Greg Piatt, who manages which bills are heard on the House floor, won't say whether he will keep the measure from full House action this session.

"Stay tuned," said Piatt, who voted against the measure in a recent committee meeting. The proposal barely passed the Rules Committee, 5-4.

Piatt said Ardmore, which makes up about 72 percent of his district, would stand to lose about $943,000 annually. The smaller cities in his district would gain about $964,000.

Any time a legislator proposes taking local money from the coffers of cities, it can raise quite a stir and make cities uneasy.

The Oklahoma Municipal League represents cities on both sides of the issue, but is against the plan and called it poor public policy.

"It would create a nightmare of litigation and turn city against city and neighbor against neighbor," said Carolyn Stager, the group's interim executive director.

"We are certainly opposed," Tulsa Mayor Kathy Taylor said. "We invest in the infrastructure and provide the services necessary to support large retail developments in the city of Tulsa. To suggest that the investments made by the citizens of Tulsa be redistributed to other cities is not equitable and not based on sound economic policy."

Ideas have been talked about for years how to help smaller cities, which are losing sales tax revenue — their main source of revenue — as bigger cities have become regional shopping and entertainment centers. It's hard to come up with a practical way to return sales tax charged to out-of-town shoppers back to their home towns.

Martin has spent the past couple of years looking at a method in which shoppers would give their home city's tax code. But that would require businesses to install equipment and to train employees, not to mention informing shoppers how the process would work.

Even if the complicated, costly proposal could be implemented, shoppers perhaps would have to present some identification so that the correct city would be credited with the sales tax on the purchase, Martin said.

His idea is much simpler. The Oklahoma Tax Commission each month would take 1 percent of each city's sales tax collections and put it in a fund. The commission then would give each city or town an amount of money based on its population in comparison to the total population of all cities and towns that had a sales tax levy of at least 1 percent.

Counties are not included in the proposal and would keep all sales tax money from their levies, Martin said.

The Oklahoma Municipal League's Stager said cities of all sizes are already over-dependent on sales tax revenue and that the "Robin Hood" practice of taking from the rich to give to the poor would further complicate the problem.

'A really big chunk of revenue'
Oklahoma City's loss of $13.4 million under the proposal is "a really big chunk of revenue to try to replace by some other means," said Jane Abraham, who monitors legislative issues for the Oklahoma City manager. "The concept is so flawed."

Oklahoma City collected about $331.9 million in sales tax during the 2007 fiscal year, which ended June 30.

Abraham said the bill contradicts the concept behind recent penny sales taxes voters have approved in the city. They include the original MAPS sales tax that helped revive Bricktown from an empty warehouse district to thriving entertainment center that attracts tourists from across the state, and the MAPS for Kids tax that benefits public schools.

"Our citizens voted in these taxes for specific purposes and I think there's a lot of questions as to whether that would be sound public policy to use those for a different purpose than what they were originally voted for," Abraham said.

Oklahoma City voters decided last week to replace the MAPS for Kids tax with another penny sales tax when it expires. That tax would raise $121 million for improvements to the Ford Center designed to lure an NBA team.

A large part of Tulsa's $500 million operating budget is funded by sales tax. The budget would take a $16.1 million a year hit under Martin's proposal. The sales tax brought in $202.6 million during the 2007 fiscal year.

That would affect services such as public safety and street maintenance the most, said Kim MacLeod, the mayor's spokeswoman.

Martin said he understands his proposal will be unpopular with some cities.

"You're going to take an advantage away from somebody and they're going to fight it," he said. "It is the responsibility of the state to see that the system is fair and effective.

"If we can actually get it to a vote of the people, we will have a strong chance of passing it," he said. "If we don't, then we tried."

[TeeDub]

While I like the idea....    It sounds like a government idea to create another layer of bureaucracy and state jobs that will have to be funded out of this tax grab.   We all know that they will have to hire people in to oversee the tax collection, and a few more to make sure it is disbursed right, and a couple more to ensure compliance in the spending...

No...   More than I don't want to see the taxes leave the bigger cities, I don't want to see bigger government.

[TheArtist]

Aaabsolutely not.

[sgrizzle]

The state already gets more in sales taxes than the city does as it is. They can kiss my _______(noun) on this one.

[Townsend]

They can kiss more than my noun

[cannon_fodder]

I'd be a big fan of this if state sales tax was distributed the same way.  

Currently, State sales tax is distributed by some  "need" formula that I have never bothered to look up.  But it results in Tulsa paying in more than we receive.  Small towns get subsidized by our sales tax dollars because of need (correct me if I'm mistaken).

It seems like the worst of both worlds to then distributed Tulsa's municipal tax money to OTHER cities based on population.  If population means you should get a larger piece of the pie, then shouldn't we be getting MORE state money?  At least as much as we pay in...

and the counter proposal to give the money back to the spenders community is BS too.  They drive down a Tulsa freeway to get off on a Tulsa road and utilize Tulsa police and other services while here to shop at a Tulsa store... and then the sales tax revenue goes back to po-dunk city where property taxes pay for their under-utilized roads already.  Funny how much people appreciate living "near the city" to use our shops, airport, entertainment and other services but are more than happy to remain a net drain on our community (tax wise).

[South County]

quote:Originally posted by twizzler

From the way I read this proposed bill, most Tulsa suburbs would lose sales tax, too. Broken Arrow would see a slight gain.

Many Tulsa suburbs have a higher rate of sales tax collections compared to their populations than the city of Tulsa does, and thus would be donors as well. Broken Arrow is the only one that really doesn't - and that is probably mostly due to the pull of the 71st Street corridor which is mostly in Tulsa.

This bill would mainly benefit smaller rural towns. The rural contingent feels that larger, wealthier cities are pulling their sales tax revenues away when their people go shop in the larger cities/suburbs.

Good ol' Oklahoma populism at work.

I agree with Twizzler. This hurts the suburbs as well. I think this is more of a rural vs. urban rub. To create a system to punish cities that work hard to land commercial growth and sales tax dollars is foolish.

To me the problem is that most State Legislators don't understand the mechanics of municipal government. So when the good intentioned bills get passed, they can create "unfunded mandates" on the cities & towns, and that is what this bill does. It creates a new unfunded mandate called a "donor city".

P.S. Did anyone notice this legislator is one wild and crazy guy?[]

[YoungTulsan]

The rural towns should probably be paying MORE, since they are a larger strain on infrastructure to be in existence.  They are lucky that a long time ago it was decided to provide infrastructure for everyone, thus subsidizing their life out in the boonies which required thousands of miles of utility lines and roads to sustain them.  They are lucky with the deal they have now, that they can drive 50 miles to do anything without paying any more than I do (sans fuel tax).

[cannon_fodder]

quote:Originally posted by YoungTulsan

The rural towns should probably be paying MORE, since they are a larger strain on infrastructure to be in existence.  They are lucky that a long time ago it was decided to provide infrastructure for everyone, thus subsidizing their life out in the boonies which required thousands of miles of utility lines and roads to sustain them.  They are lucky with the deal they have now, that they can drive 50 miles to do anything without paying any more than I do (sans fuel tax).

+1

[Chicken Little]

What a crock.  A Republican legislator who is responsible for irresponsibly slashing state income tax over the last few years now decides that he wants to help small towns...by stealing from big towns.  As twizzler points out, the State already collects more sales tax than the cities.  Had they thought ahead, perhaps they could have given some of their share of the sales tax back to the cities.

This bill is eerily similar to another bill this year to limit the growth of property taxes.  Oklahoma already has one of the most restrictive caps in the nation, but the legislators can't leave things alone.  Now they feel the need to monkey with the revenue stream of the schools.

The legislature has p*ssed away their opportunity to use new oil and gas revenue in an effective, targeted way.  Oklahoma is still falling behind, and they have no resources left to do anything about it.  So they are going after everybody.  

Oklahoma is a laboratory for "low-tax" ideology...we've got the lowest tax burden in the nation.  What's the result?  Has is spurred economic growth?  No, quite the contrary.  This notion that if you cut deep enough people will invest in your state is a proven joke.  It's as tired and worn out as the roads we drive upon.

So, what's the legislature up to now?  Apparently, their "solution" is to drag everybody else into the dumpster with them?  Awful.

[guido911]

quote:Originally posted by Chicken Little
Oklahoma is a laboratory for "low-tax" ideology...we've got the lowest tax burden in the nation.  What's the result?  Has is spurred economic growth?  No, quite the contrary.  This notion that if you cut deep enough people will invest in your state is a proven joke.  It's as tired and worn out as the roads we drive upon.

Oh that's right, raising taxes is the solution. There's a long, successful track record of that spurring economic growth.

[sgrizzle]

quote:Originally posted by guido911

Oh that's right, raising taxes is the solution. There's a long, successful track record of that spurring economic growth.
[/quote]

You don't have to raise them, but roads are unrepaired, teachers underpaid, small towns clamoring for money, and the state keeps LOWERING income tax? Come on.

[Chicken Little]

quote:Originally posted by guido911

Oh that's right, raising taxes is the solution. There's a long, successful track record of that spurring economic growth.

They cut way too deep.  There's no money left to fix anything.

[Wrinkle]

Ok, looks like we need to settle for my original recommendation. That is, the State cutting their take from 4.5% to 3.5% and give a penny back to municipalities for their voting public to decide what to do with.

They'd still be taking more than Tulsa, at least until we voted on at least a half cent increase again.

[Chicken Little]

quote:Originally posted by Wrinkle

Ok, looks like we need to settle for my original recommendation. That is, the State cutting their take from 4.5% to 3.5% and give a penny back to municipalities for their voting public to decide what to do with.

They'd still be taking more than Tulsa, at least until we voted on at least a half cent increase again.

You and Taylor are pretty much on the same page...funny.  Your proposal is almost identical to the one from Taylor and the Oklahoma Municipal League this year.  The only difference is that their proposal was going to dedicate that penny to street maintenance.  It was quietly suffocated in committee.  The legislature doesn't seem to care about cities, or roads, or paying bills, or the future.