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Not At My Table - Political Discussions => Local & State Politics => Topic started by: RecycleMichael on November 10, 2009, 10:17:24 am



Title: 14.2 % drop in sales tax revenue
Post by: RecycleMichael on November 10, 2009, 10:17:24 am
http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20091110_11_A1_Tulsas648967

Sales tax revenue drops 14.2 percent
The unprecedented downward spiral started in April, an official says.
 
By BRIAN BARBER World Staff Writer
Published: 11/10/2009  

Tulsa's sales tax revenue for November is continuing in a downward spiral, dropping 14.2 percent from the same month last year. But whether that will prompt budget cuts beyond the $6 million already planned remains to be seen, officials said Monday.

City leaders just received the monthly check from the Oklahoma Tax Commission that was $15,145,911, compared with $17,649,588 in November 2008 — a roughly $2.5 million plunge. The revenue was collected from Sept. 16 to Oct. 15.

"What we are seeing is unprecedented," city Finance Director Mike Kier said, noting that Tulsa has posted declining sales tax numbers since April.  "These have been the worst eight months of revenue decline the city of Tulsa has seen in the more than 30 years we have been tracking this data." Tulsa's City Council will be presented with a budget amendment in Tuesday's committee meetings that will take the fiscal year's spending plan from $567 million to $561 million.
Among the cuts that will accomplish that reduction are 37 jobs, including 21 police officers, th e police helicopter and mounted patrol units and the police and fire academies, among other items. Eighteen of the officers have been rehired for the police force using federal stimulus funds. However, the revised forecast numbers are already not holding up. November's sales tax revenue was projected to hit $16,131,000 —nearly $1 million more than was actually generated.

Kier said it's too early to speculate on what caused the shortfall. The tax commission will release its detailed report later this month. "Well, it confirms the need for the $6 million in cuts," he said. "Whether we have to go further, we'll just have to wait and see." With the holiday shopping season coming up, Kier said, the city could possibly make up some ground. "We hope that people go out and spend," he said. "Spend locally," Kier added.

Mayor Kathy Taylor said she and her administration will continue to identify other sources of revenue and areas to cut spending, pledging to work on a smooth transition with the new mayor, who will take office Dec. 7. In an e-mail distributed late Monday, Taylor encouraged city residents to vote in Tuesday's general election, saying it is important to elect someone who will work to diversify city revenue sources. "We will continue on this roller coaster unless we elect someone tomorrow with the political will to take a hard look at our city's revenue base," she said.

"If you care about public safety and the growth of our city, you will vote for a mayor who will have the political backbone to look at the revenue side of the equation."

Kier said he and his finance staff are ready to get whoever is elected up to speed quickly.

"In my mind, it's the top issue facing the city," he said.




Title: Re: 14.2 % drop in sales tax revenue
Post by: RecycleMichael on November 10, 2009, 10:20:26 am
Message to the new Mayor and new Council:

Good luck. I agree with the finance guy. This is the most pressing issue facing the city today.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 11:10:18 am
The emphasis on Sales Tax (and the agenda for new revenue sources, police/fire district tax) is being inflated.

Sure, it's down from last year, same month. And, represents a shortfall in planning, or at least the criteria used to project.

But, Sales Tax collections represent less than 1/3rd, closer to 1/4 of the City's budgeted revenues.

Here's what I recommend.
Our new Mayor implements a 10-year, $650 million bond issue. That's right, a tax. Hopefully, one which replaces an expiring tax, like when Vision 2025 ends, or such, so that it becomes a no-change tax.

In these slow economic times, we could achieve very favorable Bond rates approaching 3%-4% and then deposit the $650M in a money-market account, drawing around 1.5%-2.5% interest. That makes the effective rate on the Bonds between 0.5% and 2.5%, slightly higher as the drawdown occurs.

These funds would be used to fund the current years' city budget, parsed out in prorated monthly installments to match last years' budget ratio. Meanwhile, all Sales Tax and other City revenue is deposited into an escrow account for the entire current year. Whatever amount is collected this year becomes next years' budget, with interest collected over the year deposited into a reserve fund. And, next years' budget is allocated directly in relation to whatever funds are received in the same month from last year.

There, no budget problems ever again. All departments would know a full year in advance exactly how much money they can spend a year from now. If they can't make necessary adjustments in that time, they get fired.



Title: Re: 14.2 % drop in sales tax revenue
Post by: TulsaSooner on November 10, 2009, 11:15:37 am
Please show me a money market that is yielding anything close to 1.5-2.5%.  The City cannot invest in just any money market, by the way....they do have an investment policy that dictates in what they can and cannot invest.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 11:23:34 am
Please show me a money market that is yielding anything close to 1.5-2.5%.  The City cannot invest in just any money market, by the way....they do have an investment policy that dictates in what they can and cannot invest.

I was guessing. But, whatever current MM rates are would effectively discount the Bond rate. Sure, it would have to be a secured investment, not speculation.



Title: Re: 14.2 % drop in sales tax revenue
Post by: cannon_fodder on November 10, 2009, 11:34:03 am
I would very much like to see tax revenue by year graphed out.  I understand we are down for the year significantly in sales tax (as much as 10% of sales tax), but our other revenues (75% of budget?) should be fairly stable or even rising.  A bar graph of total revenue by year with sources broken out in different colors in the bar would help me understand the current crisis.

I'm willing to guess our funding levels are at or near what they were not-to-long ago but we are spending significantly MORE money.

The new mayor will have a test of fortitude in a mighty big hurry.  The one thing I know from the signage is if Bartlett wins, the cuts won't be coming from the fire department . . .


Title: Re: 14.2 % drop in sales tax revenue
Post by: TulsaSooner on November 10, 2009, 12:19:21 pm
I was guessing. But, whatever current MM rates are would effectively discount the Bond rate. Sure, it would have to be a secured investment, not speculation.



Most of the Treasury-backed MM's that I've seen are yielding, literally, 0%.


Title: Re: 14.2 % drop in sales tax revenue
Post by: TulsaSooner on November 10, 2009, 12:20:43 pm
I would very much like to see tax revenue by year graphed out.  I understand we are down for the year significantly in sales tax (as much as 10% of sales tax), but our other revenues (75% of budget?) should be fairly stable or even rising.  A bar graph of total revenue by year with sources broken out in different colors in the bar would help me understand the current crisis.

I'm willing to guess our funding levels are at or near what they were not-to-long ago but we are spending significantly MORE money.

The new mayor will have a test of fortitude in a mighty big hurry.  The one thing I know from the signage is if Bartlett wins, the cuts won't be coming from the fire department . . .

I think there are a number of financial reports available on the City's website where you could find this if you were so inclined.


Title: Re: 14.2 % drop in sales tax revenue
Post by: FOTD on November 10, 2009, 12:41:07 pm


Here's what I recommend.
Our new Mayor implements a 10-year, $650 million bond issue. That's right, a tax. Hopefully, one which replaces an expiring tax, like when Vision 2025 ends, or such, so that it becomes a no-change tax.

In these slow economic times, we could achieve very favorable Bond rates approaching 3%-4% and then deposit the $650M in a money-market account, drawing around 1.5%-2.5% interest. That makes the effective rate on the Bonds between 0.5% and 2.5%, slightly higher as the drawdown occurs.

These funds would be used to fund the current years' city budget, parsed out in prorated monthly installments to match last years' budget ratio. Meanwhile, all Sales Tax and other City revenue is deposited into an escrow account for the entire current year. Whatever amount is collected this year becomes next years' budget, with interest collected over the year deposited into a reserve fund. And, next years' budget is allocated directly in relation to whatever funds are received in the same month from last year.




This looks like conversion, Wrinky. Raising taxes? What are you a liberal?

FOTD prefers a progressive tax....excluding groceries and medicine.

If you didn't see this coming, you are a good republican.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Vision 2025 on November 10, 2009, 01:07:55 pm
I think this is what they used to call "California Bonds."


Title: Re: 14.2 % drop in sales tax revenue
Post by: AVERAGE JOE on November 10, 2009, 02:41:01 pm
The emphasis on Sales Tax (and the agenda for new revenue sources, police/fire district tax) is being inflated.

Sure, it's down from last year, same month. And, represents a shortfall in planning, or at least the criteria used to project.

But, Sales Tax collections represent less than 1/3rd, closer to 1/4 of the City's budgeted revenues.

That's false. According to the Oklahoma Municipal League, in 2006 cities in Oklahoma received 49% of their revenue from sales taxes. The average U.S. city received 11% of its revenue from sales taxes that year.


Title: Re: 14.2 % drop in sales tax revenue
Post by: bokworker on November 10, 2009, 02:42:23 pm
Please show me a money market that is yielding anything close to 1.5-2.5%.  The City cannot invest in just any money market, by the way....they do have an investment policy that dictates in what they can and cannot invest.

Hmmmm ,let's see, pay 3 to 4% for money and then deposit it in accounts earning 0-1%... where I come from we call that an "aggie arbitrage"... I guess you make it up in volume.

And yes, I went to school at OSU.


Title: Re: 14.2 % drop in sales tax revenue
Post by: rwarn17588 on November 10, 2009, 02:55:43 pm
Hmmmm ,let's see, pay 3 to 4% for money and then deposit it in accounts earning 0-1%... where I come from we call that an "aggie arbitrage"... I guess you make it up in volume.

And yes, I went to school at OSU.

First, Wrinkle is miles off course on average money-market rates.

Then he's wrong on what the money can be invested in.

Then he gets the sales-tax revenue proportions wrong.

Note to self: Don't let Wrinkle ever be my money manager.


Title: Re: 14.2 % drop in sales tax revenue
Post by: shadows on November 10, 2009, 03:54:34 pm

Tulsa is only a peep in the sounding of a long note in the parade as for the lack of encouraging business they have created programs that discourage business growth, driving them to suburbs or to even off shore ventures.  

A police/fire district increases the uncontrollable home owner  taxes.  The land grabs by the city of cow pastures only increased the public safety ratio to population.  The secondary rule of the authorities/trust continue to bleed the citizens of the necessities they need.  

The failure of the city leaders to recognize the actual rate of unemployment contribute to an influx of out of state job seekers which will increase unemployment. The increase in the demand on charitable organization should be an alarm that such increases crime.  The budget should remain stable for the next three years in order for the bubble to regain its strength.  Tulsa should do like the citizens are required to do.  Tulsa should live within their income or reduce the cost to where they can.

All roads do not lead to Rome nor Tulsa any more.  :( :( :(


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 05:23:25 pm
First, Wrinkle is miles off course on average money-market rates.

Then he's wrong on what the money can be invested in.

Then he gets the sales-tax revenue proportions wrong.

Note to self: Don't let Wrinkle ever be my money manager.

I'd be pleased if you just ignored me. (that is, just you).

But, MM rates are all but irrelevant to the discussion, but appears you missed that. If they'd have been important, I'd have look up a semi-current rate. It wasn't, and wasn't close to miles off either.

Whatever it is, it was used as a means to discount the bond rate when/if possible. IOW, reduce costs. If you wish to package it up and issue new bonds every month, go for it. But, I doubt you're going to save any money in doing so. Probably cost more given the $10 million cost on every issue done here.

Where was I wrong about what it could be invested in, I stated a secure investment, not speculative. You missed that too I guess.

I did not get the sales tax proportion wrong. You've latched onto an incorrect source above who's information is inaccurate as it relates to this City (we were talking of Tulsa, right?). In Tulsa, we had $214 million in Sales Tax revenue last year and a $658 million operating budget.
It only takes middle school level math to get 32.5% contributed by Sales Tax.

So, hafta ask, did you comprehend the concept at all, or even bother to read it?



Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 05:25:46 pm
That's false. According to the Oklahoma Municipal League, in 2006 cities in Oklahoma received 49% of their revenue from sales taxes. The average U.S. city received 11% of its revenue from sales taxes that year.
Yep, that's a bogus claim on Wrinkle's part.  

Here's what Tulsa gets (http://www.tulsacouncil.org/pdfs/website%20embedded/COT_Fiscal_Constraints.pdf) (see page 23)



Title: Re: 14.2 % drop in sales tax revenue
Post by: guido911 on November 10, 2009, 05:28:16 pm
Please show me a money market that is yielding anything close to 1.5-2.5%.  The City cannot invest in just any money market, by the way....they do have an investment policy that dictates in what they can and cannot invest.

My money market gets real close to 1.5.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 05:29:09 pm
Hmmmm ,let's see, pay 3 to 4% for money and then deposit it in accounts earning 0-1%... where I come from we call that an "aggie arbitrage"... I guess you make it up in volume.

And yes, I went to school at OSU.

I went to OSU as well and was taught better somehow. If it's used to discount the cost, then it effectively makes money. Beyond that, it's only as possible and has little to do with the concept. Go ahead, pay the full 3%-4% for it if you wish.

What school teaches you to stuff money in your mattress? Or, do you prefer to bury coffee cans in your back yard?




Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 05:30:18 pm
That's false. According to the Oklahoma Municipal League, in 2006 cities in Oklahoma received 49% of their revenue from sales taxes. The average U.S. city received 11% of its revenue from sales taxes that year.

Since we're talking about Tulsa, perhaps it'd be easier for you to use Tulsa's data.



Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 05:36:15 pm
Yep, that's a bogus claim on Wrinkle's part.  

Here's what Tulsa gets (http://www.tulsacouncil.org/pdfs/website%20embedded/COT_Fiscal_Constraints.pdf) (see page 23)



You are just inaccurate, that represents ALL taxes. We were talking Sales Taxes here.



Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 05:36:27 pm
Since we're talking about Tulsa, perhaps it'd be easier for you to use Tulsa's data.


See above link


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 05:37:57 pm
See above link

Saw it the first time, and you were wrong then, too.



Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 05:40:33 pm
You are just inaccurate, that represents ALL taxes. We were talking Sales Taxes here.


Scroll and take a look.  property tax and hotel/motel tax look to be about 5%.  The rest is sales tax.  Two pennies...and the third penny.  That's all sales tax.

Texas cities get 35% (http://www.tml.org/Jan2009TTC/WhereCitiesGetMoney.pdf) from property tax and 27% from sales.  Tulsa--5% property, 45% sales.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 05:44:48 pm
Don't take my word for it, take Martinson's:

"The City has relied on a 2% sales tax since 1971 to fund operations. Granted, sales taxes rise with the price of goods purchased, but as those prices increase, so do our costs. We could probably maintain services in such an environment, but other factors are working against us as you will soon see."

The third penny is also sales tax,

"People talk about tax increases, but the last time the City of Tulsa had a tax increase was with the first 3rd penny in 1980. The 3rd Penny is a temporary tax, approved by the voters, and is essentially restricted to fund capital projects."



Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 05:51:00 pm
But, Sales Tax collections represent less than 1/3rd, closer to 1/4 of the City's budgeted revenues.
Flat-out wrong.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 06:01:18 pm
"After deducting revenues earmarked for specific purposes, we are left with about 43% of the total budget to use for general operations."

Of that 43%, it looks like 4/5ths of it is comprised of...wait for it....sales tax.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 06:07:24 pm
Flat-out wrong.


Using the Oklahoma Tax Commission ACTUAL accounting for the City of Tulsa last year, we collected $214 million in Sales Tax. Look it up yourself. http://www.tax.ok.gov/nwsrls.html (http://www.tax.ok.gov/nwsrls.html)

Now, tell me how you get to half of our Operating budget from there.



Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 06:15:44 pm
"After deducting revenues earmarked for specific purposes, we are left with about 43% of the total budget to use for general operations."

Of that 43%, it looks like 4/5ths of it is comprised of...wait for it....sales tax.

This is government smoke and mirrors.

It's like saying after I pay my mortgage, utilities, insurance and taxes, I earned only $1,700 for the year. So, my hourly rate is less than $0.82/hr.

btw, Sales Tax revenues were 100% of all Sales Taxes collected last year. (though, the city pays 1.5% to the Commission for their work to collect, account and distribute it).




Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 06:27:41 pm

Using the Oklahoma Tax Commission ACTUAL accounting for the City of Tulsa last year, we collected $214 million in Sales Tax. Look it up yourself. http://www.tax.ok.gov/nwsrls.html (http://www.tax.ok.gov/nwsrls.html)

Now, tell me how you get to half of our Operating budget from there.


Martinson's presentation indicates that the entire operating budget is $232 million...that's what the operating budget is...the general fund.  So, yeah, that's like 92%...well over half, even if you went to aggie accounting school. ;)


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 06:29:06 pm
This is government smoke and mirrors.

It's like saying after I pay my mortgage, utilities, insurance and taxes, I earned only $1,700 for the year. So, my hourly rate is less than $0.82/hr.

btw, Sales Tax revenues were 100% of all Sales Taxes collected last year. (though, the city pays 1.5% to the Commission for their work to collect, account and distribute it).



When you don't understand something, you throw your arms up in the air and claim it's all, "smoke and mirrors".  When I don't understand something, I try to learn.  But I'm running out of patience trying to understand you.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 06:46:14 pm
When you don't understand something, you throw your arms up in the air and claim it's all, "smoke and mirrors".  When I don't understand something, I try to learn.  But I'm running out of patience trying to understand you.

The City's 2008-2009 revenue projections were well over $600 million, $605 million, iirc. You can't deduct operating costs at will to arrive at your 'operations' budget, then create meaningless ratios.

I understand fine.


Quote
The total FY 09 budget is $587,385,000 – a 3.1 percent increase over the original FY 08 amount. The operating budget is $525,107,000 and the Capital Improvements budget totals $62,278,000.

http://www.cityoftulsa.org/COTlegacy/documents/0809budget/Section02ExecutiveSummary.pdf (http://www.cityoftulsa.org/COTlegacy/documents/0809budget/Section02ExecutiveSummary.pdf)

And, as you probably know, we had $25 million surpluses last year, which were also spent.

So, in your mind, what percent of $612 million is $214 million?



Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 06:48:31 pm
btw, Sales Tax revenues were 100% of all Sales Taxes collected last year. (though, the city pays 1.5% to the Commission for their work to collect, account and distribute it).
I think you are wrong...again.  The link you sent seems to be remittances to cities, not collections.  About $18 million a month...that's about right according to news (http://www.tulsaworld.com/news/article.aspx?subjectid=334&articleid=20091110_11_A1_Tulsas648967) and other fact-based sources


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 06:57:23 pm
I think you are wrong...again.  The link you sent seems to be remittances to cities, not collections.  About $18 million a month...that's about right according to news (http://www.tulsaworld.com/news/article.aspx?subjectid=334&articleid=20091110_11_A1_Tulsas648967) and other fact-based sources

Depends on how the fees are paid. If they're deducted from collections, then the city remittances would be 1.5% less. If paid as a service, like a bill, then the remittance would equal collections. Small difference, but an accouting issue.



Title: Re: 14.2 % drop in sales tax revenue
Post by: rwarn17588 on November 10, 2009, 07:17:53 pm

But, MM rates are all but irrelevant to the discussion, but appears you missed that. If they'd have been important, I'd have look up a semi-current rate. It wasn't, and wasn't close to miles off either.


If they weren't important, then why did you mention it so prominently?

And, yes, a yield of 1.5 to 2.5 percent that you quoted is miles from a rate of zero.

Hell, no wonder you confessed to being "anti-business" in another thread. You have no concept of basic math.


Title: Re: 14.2 % drop in sales tax revenue
Post by: TulsaSooner on November 10, 2009, 07:20:18 pm
The City pays the Oklahoma Tax Commission 1.0% to collect and remit sales taxes.

And whoever said their MM is earning 1.5%, good for them...that's not bad these days.  But I'm guessing the City would not be allowed to invest in yours but they can invest in those backed by US Treasuries and those aren't paying anything, literally 0.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 07:31:22 pm
The City pays the Oklahoma Tax Commission 1.0% to collect and remit sales taxes.

And whoever said their MM is earning 1.5%, good for them...that's not bad these days.  But I'm guessing the City would not be allowed to invest in yours but they can invest in those backed by US Treasuries and those aren't paying anything, literally 0.

So what, it doesn't matter a flip. Just a way to recapture some of the rate cost with money lying around. That is not the point of this proposal.

Besides, I'd guess (yeh, I don't know for sure) but IF this were to happen, it could be 2-10 years from now. What do you think rates will be like then?

I actually might hope rates improve to at least 1.5% in a couple of years.

Everyone seems focused on the wrong issue anyway, so I officially end this thread, at least as far as I'm concerned. Knock yourselves out.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 10, 2009, 07:31:34 pm
Depends on how the fees are paid. If they're deducted from collections, then the city remittances would be 1.5% less. If paid as a service, like a bill, then the remittance would equal collections. Small difference, but an accouting issue.
Not small.  You were claiming that $214 million was collected in Tulsa.  That's the remittance.  The state kept 4.5 pennies, so the collections in Tulsa must have been $535 million.

It's not smoke and mirrors.  1/3 of the sales tax, and the water and sewer fees are special purpose and can't be juggled around to pay for cops...which was your point.  Take it off the the table and you are left with two pennies of (volatile) sales tax to pay for cops.

If sales tax plummets, and it usually does, then where do you get the money to pay for cops?  You can't raise water rates, and you can't even use that meager property tax 'cause that's for a special purpose, too.  Point is, according to Martinson's pie chart, you start with 43% of a pie, and the vast majority of that is the two cents sales tax.  So, sales tax IS hugely important when it comes to paying cops.

When sales tax takes a dump, you don't have anywhere to run to, and you have to start looking at laying people off.  When sales tax is high, I guess they throw it into a road or something, but they shouldn't be hiring based on the fact that they exceeded their projection in a given year.  That'd be stupid.


Title: Re: 14.2 % drop in sales tax revenue
Post by: rwarn17588 on November 10, 2009, 07:37:21 pm

Everyone seems focused on the wrong issue anyway, so I officially end this thread, at least as far as I'm concerned. Knock yourselves out.


Translation: I couldn't hack my half-baked musings against the facts, so I'm talking my ball and going home.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 07:47:11 pm
Not small.  You were claiming that $214 million was collected in Tulsa.  That's the remittance.  The state kept 4.5 pennies, so the collections in Tulsa must have been $535 million.

It's not smoke and mirrors.  1/3 of the sales tax, and the water and sewer fees are special purpose and can't be juggled around to pay for cops...which was your point.  Take it off the the table and you are left with two pennies of (volatile) sales tax to pay for cops.

If sales tax plummets, and it usually does, then where do you get the money to pay for cops?  You can't raise water rates, and you can't even use that meager property tax 'cause that's for a special purpose, too.  Point is, according to Martinson's pie chart, you start with 43% of a pie, and the vast majority of that is the two cents sales tax.  So, sales tax IS hugely important when it comes to paying cops.

When sales tax takes a dump, you don't have anywhere to run to, and you have to start looking at laying people off.  When sales tax is high, I guess they throw it into a road or something, but they shouldn't be hiring based on the fact that they exceeded their projection in a given year.  That'd be stupid.

I said the city recieved $214m from the Tax Commission. (remitted to the city from OTC). i.e., Tulsa 'collected' as it relates to its' 3-pennies. If you wish to get technical, businesses 'collected' the States' 4.5% and remitted it to OTC, who gave it to the State Treasurer.

That's the City's share (either before or after the Commissions' 1% take).

When you omit 1/3rd as Third Penny proceeds dedicated to Capital projects, Sales Taxes produce ($214/3)*2 = $142.67 million for the Operating Budget.

$142.67m / $525m Operating Budget = 27.28% (before the $25m surplus)



Title: Re: 14.2 % drop in sales tax revenue
Post by: Red Arrow on November 10, 2009, 07:58:54 pm
Or, do you prefer to bury coffee cans in your back yard?

Plastic peanut butter jars, they don't rust.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Wrinkle on November 10, 2009, 08:09:13 pm
Plastic peanut butter jars, they don't rust.

You make far more sense than anyone else here.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 11, 2009, 09:43:52 am
I said the city recieved $214m from the Tax Commission.
You may have meant "received", but you said "collected".  You were unclear, but that's history.

Quote
When you omit 1/3rd as Third Penny proceeds dedicated to Capital projects, Sales Taxes produce ($214/3)*2 = $142.67 million for the Operating Budget.

$142.67m / $525m Operating Budget = 27.28% (before the $25m surplus)
See, here's the problem.  You are willing to parse the revenue when it suits your bogus claim, but when a councilor's report claims that only 43% of the budget is discretionary, you call it "smoke and mirrors".

- (p30) "After deducting revenues earmarked for specific purposes, we are left with about 43% of the total budget to use for general operations."  That was $232 million in that year.

- (p22) "The City has relied on a 2% sales tax since 1971 to fund operations." That was, as you pointed out, about $142 million (depending on the year).

- (p5) Police and fire salaries are about $122 million a year.

You claimed,
 
Quote
The emphasis on Sales Tax (and the agenda for new revenue sources, police/fire district tax) is being inflated.

And you've wasted many posts trying to argue that the mayor and city council can simply dip into the balance of that $546 million revenue stream and find ways to pay for cops and firemen.  That's simply not the case.  Most of the budget is earmarked.

And these guys' salaries are, in fact, heavily dependent on sales tax revenue.  When sales tax plummets, their jobs are in jeopardy, plain and simple.

Now, if you'd simply concede that you were wrong, we could talk sense.  First, I'm not upset that 57% of the budget is earmarked.  I WANT decisions like buying a new City Hall to be difficult.  More important, I don't want those people to start making Soloman's choices involving our water system, our sewers, or, frankly, our debts.  That kind of stability is important, but because it IS stable, you may tend not to notice.

Cops and fireman should be paid out of an equally stable revenue stream.  When they talk about creating a fire district funded by property tax revenue, I think I'd gladly trade that for a similar amount of sales tax, dollar for dollar.  Because it's stable, predictable, funding, and not subject to ups and downs of the economy.

Refer back to that Texas pie chart that shows that those cities receive roughly equal amounts of sales tax and property tax.  That's a lot more stable and probably a good model for us.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Red Arrow on November 11, 2009, 12:36:19 pm
... I think I'd gladly trade that for a similar amount of sales tax, dollar for dollar.  

It usually winds up not being a trade, just another increase.


Title: Re: 14.2 % drop in sales tax revenue
Post by: Chicken Little on November 11, 2009, 12:45:34 pm
It usually winds up not being a trade, just another increase.
Often yes, but I don't think that's an acceptable excuse for doing nothing.

If they pooched us on a fire district, then voters would get them back on the third penny and turn that down.  Interestingly, the third penny brings in $71 million a year and fireman salaries are $51 million.  It could work out.  They'd be stuck trying to do capital projects with $20 million LESS per year to do it.


Title: Re: 14.2 % drop in sales tax revenue
Post by: bokworker on November 12, 2009, 08:31:15 am
I went to OSU as well and was taught better somehow. If it's used to discount the cost, then it effectively makes money. Beyond that, it's only as possible and has little to do with the concept. Go ahead, pay the full 3%-4% for it if you wish.

What school teaches you to stuff money in your mattress? Or, do you prefer to bury coffee cans in your back yard?




Wrinkle, I certainly do not want to disparage a fellow OSU grad but I fail to see why you would advocate borrowing money at a HIGHER rate than you can invest. Sure putting it in a money market account reduces the cost of borrowing but the point is it is still a COST.

Generally we should only borrow to put money to work in a manner that it yields a higher return than the cost of borrowing. If we do that then we create wealth. In the absence of generating a higher return than the cost of borrowing we destroy wealth.

In this particular example the point is not that I would recommend taking the money and burying it in a back yard. I would recommend not borrowing the money in the first place.

I wellcome your thoughts on how I am viewing this in the wrong perspective....


Title: Re: 14.2 % drop in sales tax revenue
Post by: Breadburner on November 12, 2009, 08:37:01 am
They should start by making sure everybody is paying what they owe.......


Title: Re: 14.2 % drop in sales tax revenue
Post by: TulsaSooner on November 12, 2009, 10:20:18 am
They should start by making sure everybody is paying what they owe.......

That is the job of the OTC...I don't think the City can really be involved in that as far as the enforcement, penalties, collection, etc.


Title: Re: 14.2 % drop in sales tax revenue
Post by: shadows on November 14, 2009, 03:44:46 pm
The emphasis on Sales Tax (and the agenda for new revenue sources, police/fire district tax) is being inflated.

Sure, it's down from last year, same month. And, represents a shortfall in planning, or at least the criteria used to project.

But, Sales Tax collections represent less than 1/3rd, closer to 1/4 of the City's budgeted revenues.

Here's what I recommend.
Our new Mayor implements a 10-year, $650 million bond issue. That's right, a tax. Hopefully, one which replaces an expiring tax, like when Vision 2025 ends, or such, so that it becomes a no-change tax.

In these slow economic times, we could achieve very favorable Bond rates approaching 3%-4% and then deposit the $650M in a money-market account, drawing around 1.5%-2.5% interest. That makes the effective rate on the Bonds between 0.5% and 2.5%, slightly higher as the drawdown occurs.

These funds would be used to fund the current years' city budget, parsed out in prorated monthly installments to match last years' budget ratio. Meanwhile, all Sales Tax and other City revenue is deposited into an escrow account for the entire current year. Whatever amount is collected this year becomes next years' budget, with interest collected over the year deposited into a reserve fund. And, next years' budget is allocated directly in relation to whatever funds are received in the same month from last year.

There, no budget problems ever again. All departments would know a full year in advance exactly how much money they can spend a year from now. If they can't make necessary adjustments in that time, they get fired.

Instead of investing a bond issue in the MM the chance would be much better investing in the EURO at now around 2.5 dollars for each EURO.  Each time US print stimulus dollars the float ratio will change to where the ratio could reach up to 5 dollars per EURO giving us a 100% earnings which would allow the employment of thousands of more city employees.

Once there was a statute where a municipalities budget could not be increased more than 10% over the previous year regardless of the source. Any money left over from the previous year had to be used to reduce the current budget.

Course that did not apply to the state of Tulsa.  
 ;D ;D ;D ;D


Title: Re: 14.2 % drop in sales tax revenue
Post by: Composer on November 14, 2009, 05:57:31 pm
November Sales Tax Reports from Oklahoma Tax Commission

Bixby:             $483,480      -23%
Jenks:             $272,205      -23%
Coweta:           $205,516      -17%
Broken Arrow:  $2,163,862    -14%
Tulsa:             $15,145,911   -14%
Sand Springs:   $678,844      -14%
Wagoner:         $181,579      -13%
Owasso:           $1,222,181   -10%
Claremore:       $751,830      -10%
Sapulpa:          $831,548       -9%
Collinsville:      $86,449         -7%
Glenpool:         $361,455       -2%











Title: Re: 14.2 % drop in sales tax revenue
Post by: shadows on November 14, 2009, 06:35:52 pm
If you took the total taxable sales from the most completive towns it would only cover ˝ the total shortage Tulsa needs.  There seems to be a dark cloud hanging over Tulsa’s future unless there is some wage cutting.  They were so easy to increase but the decreasing may be quite painful.


Title: Re: 14.2 % drop in sales tax revenue
Post by: MDepr2007 on November 14, 2009, 09:15:27 pm
Maybe city officials shouldn't have given firefighters and policmen raises from extra tax left over from the previous fiscal year.


Title: Re: 14.2 % drop in sales tax revenue
Post by: shadows on November 15, 2009, 06:43:58 pm
Maybe city officials shouldn't have given firefighters and policmen raises from extra tax left over from the previous fiscal year.

If the money was left over after the end of facial year of June 30th then the statutes were violated.  This is why it is being predicted that in the next 30 years there will be a change in control of this land.  With the increasing of  the melting of the ice caps the land area is decreasing.