Tulsa's next capital improvements proposal will have a "safety valve" to allay fears that its open-ended deadline constitutes a blank check, city councilors agreed last week.
Officials have proposed extending sales taxes of 1.167 percent until the proposal's projects are fully funded - a departure from most previous funding packages, which expired on predetermined dates regardless of whether tax collections met projections.
The proposal - now tentatively $919.9 million - includes about $565 million in sales tax-funded projects. Finance officials estimate that collecting that amount would take 5 1/2 to six years.
Councilors said Thursday that adding a "safety valve" or "backstop" to prevent the taxes from continuing too long would satisfy residents who have called the proposal a "blank check" at recent town hall meetings.
They agreed to set a deadline seven years after the taxes are renewed July 1, 2014, forcing them to expire then if they had not done so already.
"It's not a blank check - it ends when the revenue has been brought in - but I can see how some residents have a concern that if our sales tax rate starts to slow down that this could go on indeterminately," said G.T. Bynum, who chairs a council committee that is helping craft the proposal.
Finance Director Mike Kier told the council that a seven-year backstop would stop the taxes in the event of a catastrophic economic decline but still virtually ensures that they would remain until the projects are funded.
Council Chairman David Patrick called the measure a "marketing ploy."
"That's to help sell the thing," he said. "I certainly think we would collect the money well in advance of that."
Councilor Phil Lakin added that he supports the backstop "if it gives voters a peace of mind," but he said his main goal is to ensure that the tax does not expire before the projects have been funded.
Kier noted that although this method could allow the taxes to continue for longer than projected, it could also allow them to expire sooner - depending on sales tax trends.
Assuming a 1 percent annual growth rate, the tax would expire after six years, he said.
Patrick, a leading proponent of setting the expiration by amount, argues that the method prevents what happened after the 2001 third-penny sales tax package, which had a five-year deadline but fell about $70 million short of its $390 million projection, due largely to the national recession that followed the Sept. 11, 2001, terrorist attacks.
Voters were asked to extend the tax again in 2006 to cover projects they had previously approved in 2001. That initiative's expiration was set by amount.
The new package would extend the 1-percent third-penny tax and the city's share of the county's 0.167-cent former 4 to Fix tax. It also would authorize $355 million in general obligation bonds over five years.
Councilors aim to vote this week to send the proposal to the Nov. 12 election.
Councilors also agreed to remove from the funding proposal a $450,000 allocation to replace the BOK Center's fire alarm system and the proposed $850,000 to upgrade the Cox Business Center's air system and its exhibit hall roof.
Bynum had proposed the move, saying residents seem to oppose the projects because the facilities should be able to fund them using their own revenue.
Zack Stoycoff 918-581-8486
zack.stoycoff@tulsaworld.com
Original Print Headline: 'Backstop' will turn off city tax
