Council members attended their annual budget workshop Tuesday, where they heard from economists — as well as city finance and budget officials — on projections on the economy and the fiscal state of the city.
People paying for damage from last spring’s hailstorm has been one of the major driving forces that has kept sales tax revenue up, although it appears there has been some economic growth unrelated to the weather, said Russell Evans, director and research economist at the Center for Applied Economic Research at Oklahoma State University.
America is probably not facing a double-dip recession, and any economic growth for the country as a whole will help boost the state’s economy as well, Evans said.
“Oklahoma needs a national recovery in order for us to recover,” Evans said. “We don’t need much — we just need the U.S. to grow 2 to 2.5 percent, and that’s enough to spur activity in Oklahoma.”
It will probably 2014 before the state returns to 2008 revenue levels, he said.
“We’re certainly not immune from the recession, we’re not immune from the downturn; we weathered it better than many of our peer states, and we’re poised to recover ahead of, more aggressively, than many of our peer states,” Evans said.
POSITIVE PROJECTIONS Beginning in March 2009, city sales tax revenue began declining into negative territory, and it was not until last May that the city began seeing growth in sales tax collections again, said Assistant Budget Director Doug Dowler.
The city’s sales tax revenue declined from $109. 6 million in fiscal year 2009 to $97.1 million in fiscal year 2010, Dowler said, and while the hailstorm likely fueled the increase in revenue seen in 2011 — a projected $111.1 million — growth will return to normal as it tapers off, giving Oklahoma City a projected $109.1 million in fiscal year 2012.
The city will likely see .5 percent growth in sales tax revenue next fiscal year and about 3.5 percent growth between 2011 and 2015, he said. Because the city cut the budget this fiscal year, the higher-than expected revenue collections will allow the city to bolster its reserves.
Currently, departments are preparing their budgets on the assumption of no spending cuts, he said. In addition, several police and fire positions currently being paid for by the MAPS 3 use-tax fund should be moved back into the general fund.
The city will have a proposed budget presented on May 3, and the goal is to have the budget adopted by June 14, said Jim Couch, city manager.
This article appears in Jan 26 – Feb 1, 2011.