Wednesday, March 10, 2010

No bottom yet

Tulsa's sales-tax revenue this month dropped 11.6 percent or about $2 million from March 2009, capping off 12 straight months of negative numbers.

That's actually $122,000 above the revised budget projections for the month, Finance Director Mike Kier said.

Considering the city's use taxes — those levied when products are bought from another state — were below estimate by $332,000, there's still less money going out of than into the general operating fund.

But at this point, no additional cuts are planned, Kier said.

"We are going to hold for the moment," he said. "I think succeeding months are becoming more important, not just for the rest of this fiscal year (which ends June 30), but for expectations for next year."

April's sales-tax check will be particularly telling because it was April 2009 when the city's downward spiral began, Kier said.

"We need to get closer to leveling off," he said. "If we continue to drop 10 percent or more this April, and that's on top of our decline last April, that would be a sign that we're not finding the bottom yet."

Tulsa's March sales-tax payment, including interest, from the Oklahoma Tax Commission was $14,945,912, compared with $16,903,291 last year.

The revenue was collected from Jan. 16 to Feb. 15.

Overall for the fiscal year, which began July 1, the city is down 11.1 percent in sales-tax revenue, or about $18.3 million.

Use-tax revenue is down 14.3 percent or $2.2 million.

A budget amendment that reduces the general fund's revenue intake by $10 million is still pending with the City Council.

It formalizes cuts to city departments including police layoffs, park community center closures and others, even though Mayor Dewey Bartlett already has taken the cost-cutting actions.

Earlier cuts were made this fiscal year by then-Mayor Kathy Taylor.

Since the decline in sales tax revenues began early last year, current and previous city administrations have reduced operating expenses in the general fund by about $27 million.

Bartlett said he hopes a forthcoming review of the city by KPMG, a consulting and auditing firm, will help leaders get control of Tulsa's volatile finances.

The review should be done by summer.

"Finding solutions to our financial situation by reviewing our core businesses is one approach that will steel the city against future economic declines," he said. "We continue to look for new ways of doing business."

Tulsa is certainly not alone, with sales-tax revenue down in most area cities.

In Sapulpa, the latest sales-tax check came in 10.9 percent below what was remitted in March 2009.

Despite that downturn, city officials are not panicking, said Sapulpa Finance Director Pam Vann.

Vann said the city has revised its budget for the remainder of the fiscal year, based on an agreement between police officers and non-uniformed employees to take four furlough days.

When all the furloughs are considered, she said, the sales-tax check it received this month is just $18,194 short of the city's revised budget projection.

Sand Springs officials said sales-tax collections there were down 4.8 percent for March, but the percentage decline was not as severe as the declines in the last quarter of 2009 and the first part of this year.

"Our focus remains on sustainability, and we will likely look at lower sales-tax numbers as a new reality at least in the near term," Sand Springs City Manager Douglas Enevoldsen said.

Bixby's sales-tax revenue dropped 7.8 percent. City Manager Blu Hulsey said the city will continue to keep projects on hold and monitor spending.

Jenks was down 9.6 percent this month compared to March 2009 and is lagging 3.82 percent for the fiscal year.

Jenks Finance Director Josh McCorkle said that officials have impounded capital items and are not filling vacant positions. The finance division is down two people.

"Every department has been affected," he said.

Other drops over March last year include Catoosa with 16.6 percent, Claremore with 11.3 percent, Broken Arrow with 5.3 percent and Owasso with 1.2 percent.

Meanwhile, Collinsville experienced a sharp uptick, with sales-tax revenue jumping about 15.8 percent over the same month a year ago. City officials there credited campaigns stressing the importance of buying locally.

Coweta's sales-tax check was up 26.2 percent. But City Manager Steve Whitlock said that number is an anomaly, likely including revenue from the previous month.

The monthly calculations are partially based on revenue estimates with the difference made up the following month.

"We think it's a correction," he said. "When we compare to the region, we're pretty consistent."

Glenpool continued its positive trend due to new retail there, with a 7.8 percent increase compared to March 2009.

Muskogee's sales-tax receipts were up 7.7 percent, but most of that bump was due to half-cent sales tax rate increase that took effect last fall for street, sewer and other capital projects.

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