CM Assistant Offers City Revenue Review – Shawnee News-Star
Vicky O. Misa
The Shawnee News-Star [email protected]
This week, Shawnee Deputy City Manager Jacob Foos provided a breakdown of the city’s revenue streams, explaining where the money comes from — and by what percentage — funds community operations.
“Oklahoma is the only state in which municipalities rely almost entirely on sales tax for general operations, such as staffing expenses,” he said. “It’s important because staff costs are usually a municipality’s largest annual recurring expense.”
Foos said even within the state, municipalities are the only general government entity that lacks diversified revenue streams for general operations.
“The only caveat is that cities can now levy up to 5 mill ad valorem tax through a Public Safety Protection District (PSPD),” he said. “The maximum mill royalty under the PSPD would be approximately 4% of the Town of Shawnee’s general fund. »
Currently, Shawnee’s sales tax rate is 9.495%.
Foos said the rate is a combination of sales taxes implemented by three entities: state, county and city.
“The 9.495% rate includes 4.5% state, 1.495% county, and 3.5% city,” he said.
Oklahoma The state portion is the largest piece, and uses of the collections are established in state law, Foos said.
“While allocations may change from year to year, for fiscal year 2023 they consist of the General Revenue Fund (83.36%); the Education Reform Revolving Fund (10.46%); the teachers’ pension system (5.25%); Oklahoma Tourism (0.87%); and the Oklahoma Historical Society (0.06%),” he said. “The 4.5% is applied statewide.”
Pottawatomie County The county sales tax share is 1.495%.
Use 1% of this tax (permanent, voted in 2008) to:
• Roads and bridges (60%)
• Pott. County Public Safety Center (20%)
• Pott. County Fire Departments (7%)
• Sheriff’s Emergency Services (1.0625%)
• County Ambulance Service (1.0625%)
• Pott. County E-911 (1.0625%)
• Additional pot. County Emergency Management Services (1.0625%)
• OSU Extension Center (2.75%)
• Economic development (2%)
• Elderly (2%)
• Soil conservation services (1%)
• Free Fair/Junior Livestock Show (1%) Of the remaining 0.495%, a temporary 10-year tax was passed in 2015. The majority – 99% – is split among 14 county public school districts and the remaining 1% goes at the One Safe Place Family Justice Center.
The maximum sales tax rate allowed by the state for a county to adopt is only 2%, Foos said.
Comparing Pottawatomie County’s tax rate to others in the state, 24 counties in the state assess the maximum, while 38 counties assess a rate below 1.5 percent.
“An important trend to note is that more populous counties tend to be less dependent on sales tax and can get by on ad valorem taxes,” he said.
Town of Shawnee The city sales tax rate is 3.5%.
General Fund activities are funded by a permanent 2% tax that was approved by voters in 1976, Foos said. These funds support the city’s civic functions.
He said 1% is also a permanent tax, passed in 1999, which is used for capital improvements, economic development and debt service (7/8ths of collections), then police and firefighters receive each 1/16th of the tax.
The remaining 0.5% is a temporary 10-year sales tax approved by voters in 2018. It is earmarked for public safety (one quarter), streets and roads (one quarter), and public parks and amenities ( half).
In comparison Shawnee, with its combined sales tax rate of 9.495%, is at the higher end of the spectrum, followed by Stillwater, which collects 9.313%. Foos said Broken Arrow has the lowest combined rate at 8.417%.
Looking at city sales tax rates alone, Foos said Shawnee had the second-lowest rate (3.5%), just above Bartleville’s 3.4% rate.
“Ten of the top 15 cities have a municipal sales tax rate of 4% or higher, with Midwest City leading at 4.6%,” he said. “This illustrates the impact of the county sales tax rate when comparing Shawnee’s combined sales tax rate to other communities.”