Oklahoma City sales tax has surprises

Reopening in Oklahoma City appears to have gone better than some expected.

COVID-19 emergency orders first took effect in mid-March, followed by shelter-in-place, a surge in unemployment and a sagging economy.

Oklahoma City sales tax revenue fell 16% in May and 17.7% in June. City budget officials expected more of the same for July.

But while sales tax reported Thursday declined 7.8% from the same time last year, results were better than the 12% decline that had been projected, said Doug Dowler, the budget director.

July's sales tax represents economic activity the last two weeks of May and first two weeks of June, coinciding with state and local rollback of emergency orders and reopening of the economy.

The rosy news came with a warning, though.

"I am very nervous about the end of the additional unemployment benefits granted under the CARES Act at the end of July," Dowler said in an email.

"With so many people unemployed, I believe that extra funding has been a boost to the local economy," he said. "When that goes away I know many people will be in a much more dire financial situation."

The federal CARES Act provides an additional $600 per week on top of regular benefits for individuals qualifying for unemployment.

Dowler said the fiscal year that began July 1 is off to a better- than- expected start but there" is still so much uncertainty in the economy."

He said the city is sticking with its hiring freeze and outlook for the year, which includes a 5.2% reduction in the general fund, the primary account for day-to-day operating expenses.

The city council made across-the-board cuts in departmental operating budgets and cut 168 jobs. Eight employees were laid off.

Dowler said the city received $37.4 million in sales tax and an "unexpected" 9.6% increase in use tax, totaling $7.1 million, for July.

A growing portion of use tax is driven by online retail purchases.

Overall, the general fund started the budget year nearly $ 1.5 million ahead of projections.

Sales tax is the city's singlelargest revenue source. Public safety and the zoo benefit from dedicated sales taxes, and a 1-cent sales tax funds MAPS 4.