Consumer confidence propels Oklahoma City sales tax gains
Oklahoma City’s sales tax revenue for Marchis up 19.5 percent compared to this time last year, attaching an exclamation point to an 11-month string of increases.
While the ¼-cent sales tax increase approved by voters last year contributed, said Doug Dowler, the budget director, “it was a very good month regardless.”
The city collected $36.3 million, a record for March.
The figure contrasts with the 2.8 percent slide in sales tax revenue recorded in March 2017, when collections totaled $30.4 million.
Sales tax is the city’s single-largest source of revenue and comprises a significant portion of the public safety budget.
A 1-cent sales tax collected between 2010 and 2017 finances MAPS 3 projects, including the streetcar and convention center.
A MAPS for streets extension that took effect Jan. 1 will finance a $240 million crash program of street resurfacing and rehabilitation beginning this year.
Above projections
The sharp increase in March follows increases of 6.4 percent in February and 7.8 percent in January.
Through three quarters of the fiscal year, revenue is well ahead of projections, with consumers appearing eager to spend.
Latest sales tax results are based on consumer spending the last two weeks of January and first two weeks of February.
Results track with the national Consumer Confidence Index, which in February hit its highest level since November 2000.
Oklahoma City’s jobless rate checked in at 3.9 percent in January, down from 4.2 percent in January 2017.
Dowler said the general fund, the account for dayto-day expenses, was $4.6 million, or about 2.8 percent, above projections.
Sales tax growth, he said, “reflects the improving economy in Oklahoma City and does not appear to be tied to any one specific thing.”
New figures from the U.S. Census this week showed the Oklahoma City metro area added almost 1,000 residents per month between mid-2016 and mid-2017.
Projections by the city’s consulting economist support a continuing upward swing in population and employment.
2018-19 outlook
Economist Russell Evans’ outlook prepared for the city council projects a leveling out of metro population growth at about 1.4 percent in 2018 and 2019.
That would push metroarea population to 1.43 million in 2019.
Evans had forecast underlying sales tax growth of 9.6 percent to 9.9 percent for March.
The model was a little under the actual figure of a 12.2 percent.
For February, the model had predicted 7.6 percent to 7.9 percent growth, a little over the actual result.
For the final quarter of the fiscal year, the model forecasts growth of:
• 6.6 percent to 7 percent in April.
• 2 percent to 2.3 percent in May.
• 6.5 percent to 6.8 percent in June.
Dowler said Evans’ forecast for underlying growth excludes the ¼-cent sales tax increase approved by voters last September, giving a truer comparison to the same time last year and clearer picture of the economy’s trend line.
Employment is projected to increase 1.8 percent this year and 2 percent next year, making 2019 the third consecutive year for job growth.
The outlook is for 3 percent to 3.3 percent sales tax growth in fiscal 2019, said Evans, executive director of the Steven C. Agee Economic Research and Policy Institute in the Meinders School of Business at Oklahoma City University.