Focusing on funding challenges
O klahoma’s system of financing local police and fire protection, dependent as it is on sales tax, is broken, Mayor Mick Cornett said Wednesday.
Growth in online retailing robs local government of revenue from taxes collected by local merchants, Cornett said in his 2017 State of the City address.
“It’s important for me to communicate to you, we need to advance this conversation,” Cornett told 1,500 business leaders at the Cox Convention Center.
“The way we’re funding municipal government in Oklahoma is no longer a working, viable model,” Cornett said. “We’re seeing our sales tax slip away.”
Cornett, Oklahoma City’s first four-term mayor, delivered his 13th-annual assessment of the city’s prospects at a luncheon hosted by the Greater Oklahoma City Chamber.
“People are buying more and more things on the Internet,” he said. “Depending on what they buy and who they buy it from, they may or may not be paying sales tax.”
Tax is still due, he noted, but self-reporting by consumers “is probably not getting the level of compliance that we would hope for.”
Oklahoma City’s sales tax revenue for the January reporting period, reported this week, was down 3.5 percent from the same time last year.
Year-over-year monthly sales tax collections have been down in 15 of the past 16 months.
City leaders attribute much of the slide to the downturn in the oil-and-gas industry but recently have vigorously expressed concerns about online shopping.
The January sales tax check reflects local retail activity in late November and early December, and could signal an increasing shift to online holiday shopping.
Adobe reported last week that digital holiday sales were up 11 percent from last year, based on its analysis of visits to shopping websites, according to The Washington Post.
Adobe software powers many online retail sites.
Recent state reform proposals that could help cities include broadening the sales tax base.
“We could use some help at the state level in the way that cities are financed,” Cornett said.
Cornett said cities also could use help from Washington, where legislation to require online retailers to collect and remit taxes — “the loophole in the Internet sales tax equation,” as the mayor described it — remains pending.
“We’ve been waiting on that for, like, 12 years and at some point you have to realize help may not be on the way,” Cornett said.
In Oklahoma City, a 2-cent sales tax is the single-largest source of revenue for the general fund, the account that finances services including police and fire protection. In addition, a dedicated sales tax of threequarters of a cent is split between police and fire.
In his 38-minute address, the mayor also covered some other topics.
Arts
Encouraged his audience to support the arts, saying the economy benefits.
Cornett said the Matisse show at the Oklahoma City Museum of Art last summer attracted 62,000 visitors, coming from all 50 states and 12 foreign countries.
Lyric Theatre is a catalyst for development in the ever-more-popular Plaza District, he said.
Cornett said the nonprofit Allied Arts has a $3 million fund-raising goal this year and deserves help from a broad crosssection of the community in getting there.
Technology/streets
Said changing times and advancing technology require a “change the way we view and consider education. Learning is a lifelong necessity.”
“Employers have to keep investing in training and educating their employees,” Cornett said. “Kids have to keep learning throughout the summer.”
Acknowledged the demand of residents for smoother streets. “Our streets need some attention,” he said. “We hear you.”
Recognition
Cornett singled out several audience members for special recognition, including longtime Ward 4 Councilman Pete White, who is retiring, and American League Rookie of the Year Michael Fulmer, a pitcher for the Detroit Tigers who attended Deer Creek Public Schools.
Cornett introducedMarshall Hanna, who flew 22 missions over Germany during World War II before being shot down on the 23rd. Hanna, now 95, was captured and spent 10 months in a German POW camp.
Cornett’s salute to Hanna drew a standing ovation.