Last week, Oklahoma City Council Ward 4 Councilman Pete White asked a simple question toward the end of the City Council meeting about sales tax revenue projections. The question came in light of a new report showing city sales tax revenue for the month of July was down significantly.
“With the decline in sales tax, at what point will we be seriously looking at reducing the size of a proposed MAPS 3 project?”
White’s question was followed by the time-stand-still moment before others responded. Mayor Mick Cornett chimed in with “immediately.”
“This next check is something we ought to take a look at,” Cornett said, referring to the city’s next sales tax revenue deposit.
Ward 8 Councilman Pat Ryan voiced concern on the road ahead.
“We are going to have our work cut out for us over the next week or two to look at those projects and prioritize and be sensitive to the economic conditions we are looking at,” Ryan said.
But City Manager Jim Couch reassured the council all is well.
“We do revise MAPS 3 projects regularly.”
White’s question was not just aimed at whether or not the amount of a new MAPS proposal needs to be adjusted, but also squared on what projects could be included. There are competing interests at stake as the council moves toward another vote, and depending on which interests get left out could mean the difference between pass or fail come election time.
“As it has declined (sales tax revenue), the wish list has increased and the cost has increased and the amount of time we originally talked about doing it in has increased accordingly,” White said. “It seems to me at some point we are going to have to pretty quickly come to a consensus about the size of the project and the length of time.”
The newest MAPS proposal has been dominated by three projects: a new convention center, a downtown city park and either a new or upgraded form of mass transit. The convention center ranges from $250 million to $400 million while transportation improvement costs have been suggested at about $100 million. No figures have come out on the park.
The first MAPS, approved in 1993, raised $309 million for revitalizing downtown. The second MAPS, dubbed MAPS for Kids, received overwhelming voter support in 2001. The project paid for new buildings for Oklahoma City Public Schools and surrounding metro districts. More than $500 million came from sales tax revenue, with roughly $180 million from general obligation bonds.
The length of time and dollar amount for MAPS 3 have not been determined, but Cornett said the duration will be in the neighborhood of the two previous MAPS measures.
Meanwhile, White is concerned about what might happen if projections head south.
“If revenues continue to decline, emphasis will shift from listing the projects to be placed on a MAPS 3 ballot to how we continue to provide basic services,” White told Oklahoma Gazette.
According to the latest city sales tax figures, the July allocation to the general fund was nearly $2 million short of projections and more than 9 percent below collections a year ago. The one-year drop is the largest since 1994, not counting tax rate or state law changes. The city manager’s report stated the decrease is not the result of missing payments or large refunds, but simply less spending from the public.
But Couch doesn’t see the trend lasting too long.
“If you are taking a look at projections for a MAPS 3 project, they could go down some but not as much as you think because overall, long term, the growth rate has been fairly consistent,” Couch said.
Couch said both historical data and growth rates are used to project how much a MAPS initiative could spend, which when averaged out comes to about $100 million per year. If MAPS 3 is the same length as the first two MAPS, seven years, the total could be $700 million.
“The bottom line is, things are reciprocal, they come back, especially if you are talking about a seven-year program,” Couch said.
It was also a point emphasized by the mayor at the council meeting.
“It’s not different from MAPS for Kids,” Cornett said. “We voted in November of ’01, right after 9/11 had impacted the economy, and at the end of the day, at the end of those seven years, we were right on the number.
“There is precedent to have a very similar situation that has been faced and the challenge met before.”
In fact, the City Council voted on the day of the Sept. 11, 2001, terrorist attacks to call for an election of a half-billion plan to rebuild schools.
The council is expected to call for an election sometime in December. “Scott Cooper