News
Lower Revenue Collections Trigger Revised Budget Projections
The national economic trends continue to have an impact on
Tulsa. Tulsa Mayor Kathy Taylor said today the latest information
on monthly revenues, including sales and use tax deposits and
utility franchise receipts, suggest the Tulsa economy is recovering
at an even slower pace than predicted.
"While we took serious action to reduce our current general fund
budget by eliminating 96 positions and decreasing expenditures of
sales tax by $10 million, information from this October's reports
indicate an even more significant decline in sales tax than
projected," Taylor said. "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," Taylor said.
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.
Budget Director Pat Connelly said the City of Tulsa's spending
has remained conservative, but revenue declines will require a
further reduction in expenses. In addition to revising sales tax
estimates, use tax and franchise tax reciepts projections for the
remainder of the fiscal year are being reset at lower levels,
Connelly said.
Taylor said the 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.
"Our local economy is dependent on business success and retail
spending. The national and gobal economy will have reveberations on
business in Tulsa - especially those that operate in a national or
global market."
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. However, local government services are almost entirely
dependent upon sales tax revenues.
"The volatility of sales tax as a revenue source is a major
concern. The budget reductions we have made to date were intended
to lessen the impact to citizens and City of Tulsa employees, to
maintain the service levels," Taylor said. "Given the latest
revenue estimates, our only option at this time is to reduce its
costs. But in the long term, we need to identify a new
revenue source and work to diversify our funding sources."
By comparison, other Oklahoma cities, including Oklahoma City,
are also reporting lower tax collections from last year and
adjusting their budgets to reflect lower revenues.
