Slow tax collections prompt new OKC budget reductions

City Manager Jim Couch has ordered department heads to prepare for midyear budget cuts of 1.25 percent in response to persistently slow sales tax collections in Oklahoma City.

Couch said in a memo dated Sept. 13 that the reductions would amount to $4.5 million.

The memo followed word that sales tax collections for the September reporting period were off 5.8 percent from the same time last year.

Couch warned further reductions may be required for fiscal 2018.

“This is a difficult time for all of us and the decisions we make will impact our employees and citizens,” he wrote.

“We have faced challenges like this in the past and been able to navigate through difficult times like these,” Couch said. “We will all need to work together … to continue to provide the very best services we can within the resources available.”

Couch ordered a hiring freeze beginning nearly a year ago. Capital spending in the general fund was reduced, and controls on spending contingency funds were tightened.

Couch required and the city council approved 5.5 percent reductions from most departments, and lesser amounts from police and fire, for the fiscal 2017 budget that took effect July 1.

The number of positions in the city workforce was cut by 44, to 4,699, and 69 authorized but vacant positions in the police and fire departments were frozen, to be filled only when revenues recover.

The September sales tax check from the Oklahoma Tax Commission totaled just under $33.9 million, down from nearly $36 million in 2015.

The September check reflects retail activity in the last two weeks of July and first two weeks of August.

Sales tax is the city’s single-largest source of revenue. Its trajectory is an indicator of where other revenue streams, from fines to franchise fees, are headed.

Sales tax collections have fallen from the same time the previous year in 11 of the past 12 months.

Couch said in his memo that the next round of reductions would be enacted by the city council through an amendment to the fiscal 2017 budget, which totaled $1.26 billion when it was approved.

The general fund, where the new reductions will be concentrated, began the year at $414.2 million.

[PHOTO BY JIM BECKEL, THE OKLAHOMAN ARCHIVES] Oklahoma City officials said last week that additional budgetary cuts may be needed as sales tax collections continue to be less than what was expected. City Manager Jim Couch told department heads to expect midyear adjustments of about 1.25 percent.