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The Road.. to Good Streets Bridges
A Bold Idea ! ½ Cent STATE Sales Tax for
Municipal Roads and Bridges
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TOWNS CITIES Where rural and urban unite!

• Municipalities are where the rubber meets the
  potholes.
• State realizes deficiencies in transportation
  infrastructure
• State provides additional funding for state and
  county roads and bridges
• Additional funding for roads and bridges but
  funding leaves out towns and cities
• City and town roads ---- left in the ditch!

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Why towns and cities need help!

• Municipalities build and maintain 26,000 miles
  of roads inside city limits.
• If you want to grow Oklahoma, improve cities and
  towns.
• Oklahoma municipalities are overly dependent on
  local sales tax.

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A BOLD IDEA ½ Cent STATE Sales Taxfor Town and
City Road and Bridges
Deteriorated, dangerous roads and bridges are a
state and national disgrace. Here in Oklahoma the
state appropriated additional funds for highways
one year and county roads another. Now it is time
to focus on roads and bridges located within
towns and cities. What is the funding
source? This proposal would give back ½ cent of
the 4½ cents of STATE sales tax generated within
the municipal boundaries of the cities and towns
of Oklahoma with some special help for towns that
dont generate much sales tax.
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A BOLD IDEA ½ Cent STATE Sales Taxfor Town and
City Road and Bridges

• How does it work and what about rural towns?
• Recognizing that some towns have little ability
  to generate any state sales tax, the proposal has
  three hold harmless levels. If a community
  generated less than 3000 per year in state sales
  tax, they would still receive the minimum of
  3000. If they produce between 3001 - 5000,
  they would receive 5000. If they produced
  between 5001 - 7000, they would receive 7000.
  All towns and cities above 7000 would receive ½
  cent of the state sales tax that was produced
  from their community.

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Why do this?

• Local roads and bridges are often the
  stepchildren in budgeting as required federal and
  state environmental mandates for water, sewer and
  storm water push roads and bridge replacement and
  repair to the bottom of the list.
• The State has diversified revenue base like a
  three legged stool. It depends on state sales tax
  (at 4.5) for less than ¼ of revenue. In contrast
  town and cities do not have a diversified revenue
  base and count on city sales tax for ½ or more of
  their general fund revenues.
• While state revenues have soared, only 1 of
  state revenues are shared with towns and cities,
  leaving town and cities to provide local service
  on their own. (OTC website)

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• All funds would stay in Oklahoma to build local
  roads and bridges. Good roads attract economic
  development which would benefit the state,
  school, counties, towns and cities.
• If you want to grow Oklahoma grow cities and
  towns. If you want to keep youth and farmers in
  the rural areas, have towns and cities that
  provide secondary income, retail, and activities
  that make people want to stay in the area.
• Minimum amounts of 3000, 5000, and 7000 would
  provide funds which rural communities could never
  generate locally, but they still have road and
  bridge needs. It would extend county road dollars
  since small communities would have new funds to
  help with local roads. Communities would have new
  local dollars to match with REAP, CDBG, and other
  grants for roads.

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Oklahoma StateRevenue Apportionment FY
2005-06

• Where STATE Sales Tax is Raised
• Total State Sales Tax 1,721,568,174
• Total State Use Tax 145,023,191
• Total Sales Use Tax 1,866,591,365
• Amount generated within
• Municipalities 1,770,220,809
• 88 percent of STATE sales tax revenue are
  generated within municipalities

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Oklahoma StateRevenue Apportionment FY
2004-2005

• Where STATE Sales Tax Went
• Cities Towns 0.00
• General Fund 1,452,925,830
• Education Rev. Fund 175,920,089
• Teachers Retirement Fund 63,015,652

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Oklahoma StateRevenue Apportionment FY
2004-2005

• Where Vehicle, Fuel, and Oil/Gas Revenue was
  Raised
• Motor Vehicle Collections 732,048,779.43
• Gasoline Fuel Tax 302,625,479.28
• Diesel Fuel Tax 115,892,406.46
• Severance Tax on Gas 653,008,578.81
• Severance Tax on Oil 211,691,571.25
• Total 2,015,266,815.23

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Oklahoma StateRevenue Apportionment FY
2004-2005

• Where Vehicle, Fuel, and Oil/Gas Revenue Went
• Cities Towns 23,892,769.09
• Counties 280,907,097.71
• Schools 414,275,548.44
• General Fund 714,901,155.37
• Transfer 1695A 162,001,637.36
• Turnpike Trust 38,733,749.35
• Participating Tribes 19,523,685.64
• State Transportation Fund 206,389,845.49

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THE BASICS Average U.S. City Revenues 2006
Source National League of Cities
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THE BASICS Oklahoma Municipal Revenues 2006
Source Oklahoma Municipal League
2006 SAI U.S. Census Forms
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Municipal Revenue SourcesAverage US and
Oklahoma Cities

• Average Oklahoma
• U.S City Town/City
• State Help 15 4
• Property Tax 28 0 General Fund 4
  Repay Bonds
• Income Tax 14 0
• Sales Tax 11 49

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Colorado City Example

• Greeley, Colorado
• Population 85,000
• Property Tax sent to Cities and
• Towns in Weld County, FY 2005
• 23, 813,911

Source City of Greeley, Colorado
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Tri State Property Tax Comparison

• Texas 28.80
• Missouri 19.26
• Oklahoma 4

In Oklahoma municipalities cannot use property
tax for general government, only to pay off
general obligation bonds voted by the people and
court judgments.
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Overdependence on Sales Tax
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Overdependence on Sales Tax
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State Sales Tax Exemptions Means Municipalities
Lose Revenue
State sales tax limited impact Municipal sales
tax BIG IMPACT
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Overdependence on Sales Tax

• Erosion of sales tax base
• Internet/Catalog tax haven 20 billion est.
  2003
• Exemptions by State of Oklahoma
• 3 in 1965, 6 in 1980, 138 in 2006 and climbing
• Pressure for more deductions
• Grocery sales tax - 228.7 million in 06-07
• Sales tax holiday hold harmless, but more
• Diminished capacity - counties (60), schools,
  hospitals, economic development, colleges

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State Increases in Sales Tax Exemptions
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Increases in sales tax exemptions

• Exemptions are like

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THE BASICS Oklahoma Municipal Expenditures 2006
Source Oklahoma Municipal League
2006 SAI U.S. Census Forms
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State Transportation Funds for Towns
Cities
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The Road.. to Good Streets Bridges
A Bold Idea ! ½ Cent STATE Sales Tax for
Municipal Roads and Bridges