House Bill 1374 would give municipalities authority — through a vote of the people — to create Public Safety Protection Districts within which property taxes could be used to fund public safety. DYLAN GOFORTH/The Frontier
Folks at City Hall have been looking for ways to lessen the city’s reliance on sales tax revenue for years. About 66 percent of the city’s general fund, which pays for most day-to-day operations, is funded from sales and use taxes.
That makes for an annual financial train wreck. Sales tax collections are unreliable at best and volatile at worst, creating a budgeting nightmare. This fiscal year, for example, the city is facing a roughly $3 million shortfall in its general fund revenues.
Next fiscal year, the gap between revenues and expenditures could reach as much as $13 million if one takes into account increased funding for employee wages and benefits Mayor G.T. Bynum hopes to put into next year’s budget.
One oft-heard cry from administrations past and present goes like this: “If only we could diversify our funding sources, we could stabilize revenues and take some of the pressure off the general fund.”
Now the city may soon have that option.
Rep. Weldon Watson, R-Tulsa, is sponsoring House Bill 1374, which would give municipalities the authority to create Public Safety Protection Districts. The measure was approved by the House 54-35 and is before the Senate.
According to the proposed legislation, municipalities — through a vote of the people — could increase the property tax rate by up to 5 mills to pay for “any costs related to fire and public safety operations and jail operations, including, but not limited to, related litigation costs.”
The Tulsa County Assessor’s Office estimates the city could raise approximately $15 million a year by increasing the millage rate by 5 mills. The estimate is based only on properties within the Tulsa Public Schools district. The actual amount raised would likely be less because the estimate takes into account all properties within the TPS boundary, but the proposed legislation would not apply to properties zoned industrial or agricultural. Commercial personal property would also be exempt.
Some advocates of the proposal say it is a good first step toward creating more funding options for Oklahoma municipalities. Oklahoma is the only state that does not allow municipalities to use property tax revenues to fund operations.
But whether the proposed legislation would be used to ease the burden on the city of Tulsa’s general fund seems far from certain. Bynum said Monday that he’s open to having that discussion.
“Would it be an overall increase in taxation? Would it be an offset, a corresponding decrease in sales tax? Would it be for existing services, or would it pay for an expansion of services?” Bynum said. “For us, I think every combination is on the table but we would want to have a public engagement process whereby the citizens can tell us what they would be willing to vote for and that is what we would put on the ballot.”
The mayor stressed that the main reason he supports the legislation is because it would provide a more reliable source of revenue for the city to provide public safety services.
“To me this is about creating greater job stability and protection for people who already have enough threat to stability because of the danger of their jobs without having to worry about it from a financial standpoint,” Bynum said.
Bynum said he remembers well what the Police Department went through during the 2008 recession when 124 officers were laid off, and the subsequent years of unpredictable budgets.
“I have not forgotten what it is like to be in that room and to see the families of our youngest police officers who are the first to go if you have to have layoffs,” Bynum said. “I haven’t forgotten the looks on their faces.”
The local police union and the City Council’s staunchest advocate for public safety spending, Karen Gilbert, say they don’t want public safety funding raised through property taxes to be used to offset public safety funding that comes out of the general fund.
“The millage limit that is on the bill, we’re talking a very small amount of money comparatively with the total public safety budget (for) police and fire,” said Jerad Lindsey, chairman of the board of directors of Fraternal Order of Police Lodge 93. “It’s enough to fix things, improve services, make things better; however, it is not enough to replace the public safety budget (in) the general fund.”
City Councilor Karen Gilbert said she would like to see property taxes raised through a proposed Public Safety Protection District be used to improve salaries for police officers and firefighters and replace or update equipment. DYLAN GOFORTH/The Frontier
Gilbert said she would like to see the additional revenue used to increase salaries and improve or replace equipment.
“I am not in favor of changing the general fund,” Gilbert said. “Then we could actually use those dollars to pay public safety workers better wages.”
Tulsa is the second-biggest city in the state, Gilbert said, but ranks around fifth in the state in pay for police officers and firefighters.
“It’s always sad to see Broken Arrow or Jenks offering better wages and being able to recruit better than we can, and they don’t have the same requirements as we do,” she said.
Jim Nace, president of firefighters Local 176, said he’s not explored the issue in detail.
“But I believe we would be more inclined toward it being an additive to the Fire Department budget, not a replacement,” he said.
Councilors Blake Ewing and David Patrick, meanwhile, are open to using property tax revenue to supplant general fund spending.
“My intent would always be to create relief in the general fund, not just to increase the public safety pool,” Ewing said.
But he’s not sure there will ever be the political will to make that happen.
“I don’t have complete confidence in that. I know where I stand, and that is that public safety is important and is a priority for me but it can’t be the only thing,” Ewing said. “But I think often times, for political reasons or whatever, other things get sacrificed at the altar of public safety.
“It ends up being not for the long-term good of the community. A well-balanced city has to consider all things, and that is something we haven’t necessarily done too well.”
Patrick said it’s too early to say what specific expenditures the Public Safety Protection District would be used for, but he was open to using some portion of it to offset public safety spending in the general fund.
“I think there is an opportunity, if it is done right, to ease up the general fund,” he said.
How much easing could be done is another question. The city’s general fund budget in 2017 was approximately $268 million, about $165 million of which went to public safety.
The $10 million to $15 million a Public Safety Protection District would produce amounts to about 6 percent to 9 percent of general fund spending on public safety and approximately 4 percent to 6 percent of the overall general fund spending.
Big picture, that may not seem like a lot of money. But the Parks and Recreation Department received about $15 million, or 5 percent, out of the general fund this fiscal year. Working in Neighborhoods, which handles nuisance complaints and property abatements, received $4.6 million, or less than 2 percent, of general fund revenues.
So numbers that might seem small in the big picture could conceivably make a big difference in easing the strain on the city’s general fund. If that is the route the city chooses to go.
Recent history tells a different story. Last year, the City Council resolution creating the Vision Tulsa permanent public safety sales tax ordinance included language stating that it was the councilors’ intent that the revenue from the new tax be added “to General Fund expenditures currently and historically allocated for public safety funding,” not supplant general fund spending for that purpose.
Whether city leaders would take the same approach with a Public Safety Protection District won’t be known for some time. First, HB 1374 needs approval at the Capitol. Then the City Council would have to figure out what the funds would be used for and pass a resolution calling for an election.
The measure as proposed calls for an effective date of Nov. 1, 2017, and requires that the issue be brought to the public as part of a general election. The next general election scheduled after the effective date is not until November 2018.
“We are talking here about local control, and also we are talking about the fact that this has to be in a general election,” said Watson. “In other words, you can’t do this in some small unpublicized, quick election where 300 people show up.”
Tulsans have had local control over public safety spending before, and if recent history is any indication, they may well be willing to tax themselves more to pay for more public safety personnel, programs and equipment.
Tulsans overwhelmingly approved the permanent public safety tax last year. City officials estimate it will generate $272 million over the first 15 years, enough to hire 165 additional police officers and 60 firefighters.
In 2014, Tulsa County voters — including those living in Tulsa — approved a 15-year, 0.026 percent sales tax to construct and operate four additional pods at the Tulsa Jail. The project cost close to $16 million after voters were given an estimate of $9.7 million.
In the same 2014 election, county voters approved a 15-year, 0.041 percent sales tax that will pay for a new $45 million juvenile justice center. The county Monday cancelled its contract with the construction manager of the project, Manhattan Construction, after being told the center could cost as much as $83 million to complete.
This is in addition to the permanent, countywide quarter-cent sales tax Tulsans have been paying to operate the Tulsa Jail since 1995.
In all, Tulsans typically pay at least $12-15 million a year in county public safety sales taxes over and above what is paid out of the city general fund and the permanent Vision Tulsa public safety tax, according to figures provided by the county Fiscal Office.
