Midwest City considers sales tax rate increase

MIDWEST CITY — City officials are asking residents to increase the city’s sales tax in an October election, which if passed, would be the highest sales tax of any city in the metro area.

On Tuesday, city council members approved an Oct. 10 election date, where voters will decide whether to pass the sales tax increase of 0.75 of 1 percent, or 75 cents per $100. If passed, the sales tax rate would increase from 8.35 percent to 9.1 percent.

Currently, Yukon and Mustang have the highest sales tax rates in the metro-area, at 8.85 percent.

City officials said the increase is necessary for a number of reasons, including to offset the increase in expenditures while sales and use tax has seen little or no growth in recent years. The increase is estimated to generate $6.4 million annually.

“Midwest City has the best water, streets, parks, and public safety departments in the state. We want to be able to continue this level of service that our citizens have enjoyed over the years. We can only provide this level of service if we have additional funds,” Mayor Matt Dukes said in a news release.

Revenues collected from the sales tax increase would be divided into three parts, with 28.52 percent going to the general government capital outlay and operations fund, 42.60 percent going to the police department and 28.88 percent going to the fire department.

Kay Hunt, spokeswoman for the city, said the increased costs of public safety are directly tied to a 2016 study of the police and fire departments, with recommendations that the city increase staffing in both departments.

If passed, the increase would allow for the hiring of six patrol officers over the next three years, beginning in fiscal year 2018-19. Three firefighters would also be hired in fiscal year 2019-20.

Hunt said there was opposition to the planned increase during Tuesday’s city council meeting and much of the response on social media has been negative, though a few residents have supported the idea.

John Spinella wrote on the Office of City Manager’s Facebook site that he could handle the increase as long as it was good for the city, but later asked how the city had little or no sales tax growth in the past four years with the number of new businesses setting up shop in that time.

Hunt said it was a common argument brought forward, but despite the new businesses, sales tax revenues remain down while costs, including health insurance and retirement benefits, continue to increase.

“The cost of business for a city is not unlike increases we see in our own homes,” she said.

She said sales tax revenues have been in decline with the increase in online shopping and the loss of business as retailers have expanded to nearby communities, adding that the city lost about $600,000 in annual revenue after a Walmart opened in Choctaw and lost money after a Sam’s Club opened in Moore last year.

Dukes said he expects residents to understand the need for the increase and support it once they realize what it’s for and once they see how it will affect them. He said he plans on giving presentations to neighborhood associations in the coming weeks.

“We haven’t really gotten out there, and telling people what the consequences are either way, once we tell our story, we’ll get support,” Dukes said.

“Once they realize it’s only 75 cents per $100, once they wrap their head around that, I think we’ll be OK.”

Council member Pat Byrne said the city had looked at several ways to generate the revenue needed to maintain services and to fund more improvements, and concluded that the sales tax increase was the best solution.

“When people are considering a move, or starting a business in our area, we want them to see the type of quality community we are. We want them to know that when making decisions, we are striving to make the ones that will ultimately improve every aspect of the community. I believe the additional sales tax is a necessary step in that direction,” Byrne said in a news release.