Cities to seek slice of revenue

By BRIAN BARBER World Staff Writer
10/28/2007

Tulsa and other cities will press the Oklahoma Legislature to give a half-penny of the state's 4.5 cent sales tax rate to municipalities specifically for street and bridge work.

Tulsa's share would be about $34.5 million annually.

The effort is at the top of the Oklahoma Municipal League's agenda for the next legislative session, and, if successful, could cost the state an estimated $182 million per year.

Under the proposal, cities would keep the half-cent collected within their borders.

Mayor Kathy Taylor said the money from the state would go a long way toward addressing Tulsa's ailing streets.

"This would be an effective reallocation of funding that would allow priorities to be met at the local level," Taylor said, adding she intends to be actively involved in the effort to persuade state lawmakers.

Councilor Bill Martinson said it's tough to hear state officials squabbling over what to do with a surplus and cutting rebate checks "as we're running on fumes over here."

Tulsa is largely dependent on volatile sales tax revenue to provide basic services, while the state enjoys a diverse financial portfolio that includes income taxes and oil and gas production taxes, as well as sales taxes, Martinson said.

"This would be an opportunity for the state to make an investment in its municipalities that drive the economy," he said.

The half-cent idea emerged from discussions between state Rep. Fred Jordan, R-Jenks, and Jenks officials.

Jordan said he hasn't yet decided whether to sponsor a bill on the issue.

"I'm still in the early stages of this," he said. "I like that it's not a tax increase. But if we take this money from the state, it's got to come from somewhere. There's no guarantee we're going to continue having surpluses."

However, the OML is already running with the proposal.

"This is something that would improve the quality of life of everyone in the state," Interim Executive Director Carolyn Stager said.

One piece of the puzzle:
Tulsa officials cautioned that the state money would only be a fraction of what's needed to fix the city's streets.

"It's going to take a mix of funding options to solve our problem, with this being just one of them," Martinson said.

Tulsa is faced with $600 million in repairs to bring the streets from the equivalent of a "D" grade on the Pavement Condition Index to a "C."

Once that is done, the city each year would have to devote $33 million to arterials and $62 million to residential streets simply to maintain that grade, according to the Public Works Department.

Taylor and Martinson last month established the "Complete Our Streets" citizens panel to determine how to best tackle Tulsa's street needs.

Martinson is also leading a council subcommittee that is exploring the issue.

"I know people are thinking this is all leading to a big tax package," he said. "My hope is that we will be able to minimize the impact on the taxpayers as much as possible."

Redirection of resources:
While taxes in Tulsa have gone up over the years, the city hasn't been the culprit.

Residents have been subjected to sales tax increases by the county and the state.

Since 1983, those two government levels have added a combined 3.517 cents of what is now a 8.517-cent tax rate, while the city has added nothing beyond the renewal of its third penny program.

As Tulsa officials have put together general obligation bond plans, they have struggled with keeping the city's property tax levy stable.

But the city's share is still less that those of Tulsa Technology Center and Tulsa County.

And because a portion of the city's levy must be retained to pay court judgments, the amount that can be dedicated to streets is less than the shares of Tulsa Community College and the library system.

Martinson said it would be up to voters to determine whether any of the property tax money that goes to these other sources should be diverted to pay for city roads.

It's a similar concept to what will be pitched to the state Legislature -- the redirection of existing resources.

"We have to look at all of our options," he said, noting the two pennies of sales tax that the city relies on for operations are already stretched thin.

Martinson said the city also could consider impact assessment fees to help pay for streets in expansion areas.

Such fees would be imposed on developers that end up building in areas where the city has made costly infrastructure investments.

"It would be a way to help pay for our growth," he said, adding that the specifics would have to be worked out.

Local income taxes and fuel taxes are possibilities but would be unpopular and could result in adverse economic development consequences, Martinson said.

More money, no doubt: The current third-penny and general obligation bond packages -- the city's major sources of capital improvement funding -- are together providing $326 million for streets.

Even though they are the largest programs in the city's history, they are still woefully inadequate, officials said.

If additional money isn't found, the backlog of repairs is expected to reach a staggering $940 million in six years.

Other cities are facing the same dilemma.

Oklahoma City voters will decide in December whether to approve a new general obligation bond program that would provide $539 million for streets and bring that city's property levy to 16 mills, compared to Tulsa's 12.67 mills.

The citizens' panel and the council's subcommittee in Tulsa are continuing their studies, with findings and recommendations due Dec. 4.

Taylor said that "every idea is up for discussion."

Martinson said he wants the report presented to the public to be exhaustive.

"I think the people want answers," he said. "They drive on the roads every day, so they understand the problem to an extent. But it's the financial part of the equation we have to make them understand."

Whatever funding solutions are decided upon, Martinson said, they have to be what the voters will see as the best -- if not the only -- options.

Potential shares

Street money that would be provided annually by a proposal to give municipalities a halfcent of the state sales tax.

Tulsa: $34,585,407
Oklahoma City: $44,409,580
Broken Arrow: $4,698,279
Sapulpa: $1,407,785
Jenks: $690,982
Owasso: $2,286,852
Bixby: $949,160
Glenpool: $217,216
Sand Springs: $1,316,534
Bartlesville: $2,379,120
Muskogee: $2,836,548

Brian Barber 581-8322
brian.barber@tulsaworld.com

Copyright Tulsa World 2007. Format differs from original publication.