Councilors mull taxes, donations to help city

BY BRIAN BARBER World Staff Writer
Wednesday, January 27, 2010
1/25/11 at 10:48 AM

Donations for public safety and possible entertainment-related taxes were up for discussion Tuesday as Tulsa's City Council looked for ways to help the city's financial bottom line.

Meanwhile, councilors during their committee meetings heard from financial officials on what it would take to establish a "rainy day" reserve fund for the city that could be tapped in budget crises.

Councilors Chris Trail, Maria Barnes and G.T. Bynum brought forward the idea of accepting donations through the city's monthly utility billing that would go toward police and fire services.

"Citizens are really concerned and are looking for some way to give," Trail said. "I've heard from so many people who have told me they'd be willing to give $5 or $10, if only there was an established way to do that."

Trail also suggested having a "round up" system. For example, if a person's water bill is $43, he or she could check a box on the bill and the number would be rounded up to $50, with the difference going toward public safety services.

"Both of these would be options," he said. "No fees would be raised. No one would put a gun to anyone's head to give."

Barnes said the program should be simple to encourage people to participate.

"If it's too complicated, they won't do it," she said.

Councilor Bill Christiansen said his district is full of conservative Republicans who don't like added fees or taxes, but they do want to give to help police and firefighters.

"We just need to make sure this is an ironclad process so that the money is going where it's supposed to go," he said.

Councilors agreed that it should be a person's choice on a monthly basis whether or not to give, rather than being locked into ongoing donations for extended periods.

Up to 155 police officers and 147 firefighters could be laid off at the end of the week, if their unions do not come to salary and benefit-reduction agreements with the city's administration.

Time would be needed to implement any donation mechanism, Trail said, and it would not be ready to solve the city's immediate financial problems.

Parks could benefit, too, since they are an important part of maintaining public safety, he said.

Councilors decided the idea should be investigated and brought back for discussion in the near future.

Fun taxes: Councilor Roscoe Turner wants to look into entertainment-related taxes and fees on everything from restaurant and liquor store tabs to BOK Center tickets, hotel rooms and rental cars, among others.

Any new taxes ultimately would have to go to public votes.

"The city's sales tax is getting eaten up," Turner said. "If people want these things and can pay for these things, then they can pay a little more and not put a permanent tax on everyone."

Turner highlighted the taxpayer money spent to build the arena and the downtown ballpark and to help develop the Blue Dome District.

As people flock to these destination points, using city infrastructure and services, it's important they help pay for it all, he said, noting that many are coming to these attractions from out of town.

A study by Council Policy Administrator Jack Blair found that such taxes could generate roughly $10 million to $17 million annually.

But some councilors criticized the idea of so-called "fun taxes."

"If we raise taxes we will drive business and industry away from Tulsa," Councilor John Eagleton said.

By targeting one particular industry, "we will get less from that industry," he said.

Christiansen mentioned the success of the BOK Center and that the city doesn't want to "kill the goose that laid the golden egg" by over-taxing everything.

Rainy days: In light of the city's ongoing financial worries, some councilors questioned whether the city could establish a rainy day fund, like the state has, to help ride out economic storms.

Finance Director Mike Kier said he believes such a reserve fund could be legally created by the city.

"Having a way to be able to smooth out the (revenue) declines probably would serve the city well if we're going to stay primarily financed by sales tax," he said, adding that the idea has been discussed before.

Such a fund would have to be carefully constructed with constraints so that the money only could be used in the event of revenue declines, not to increase spending, Kier said.

The size of a rainy day fund should be about 40 percent of the general fund budget, he said. In today's terms, the fund would need about $100 million.

To put that into perspective, Kier said, the fiscal year started out with a $255 million general fund budget, but due to revenue declines is projected to only reach $228 million — down $27 million. Next fiscal year is supposed to be the same situation.

It will probably take four years to get back to the $255 million range.

How the fund would be generated and then replenished if needed would take a firm system in place, Kier said.

All of this, he said, would have to be pursued after the current crisis.

The city now only carries a small percentage of the budget as a reserve. At the beginning of the fiscal year, it had just over $13 million but is now down to $2.5 million.

Brian Barber 581-8322
brian.barber@tulsaworld.com

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FUNDING IDEAS FOR TULSA
Chris Trail and Roscoe Turner: The city councilors have some ideas for helping Tulsa's financial bottom line. Trail would like to see a way for residents to donate to public safety through their utility bills. "Citizens are really concerned and are looking for some way to give," he said. Turner wants to look into entertainment-related taxes and fees. "If people want these things and can pay for these things, then they can pay a little more," he said.

FUNDING IDEAS FOR TULSA
Chris Trail and Roscoe Turner: The city councilors have some ideas for helping Tulsa's financial bottom line. Trail would like to see a way for residents to donate to public safety through their utility bills. "Citizens are really concerned and are looking for some way to give," he said. Turner wants to look into entertainment-related taxes and fees. "If people want these things and can pay for these things, then they can pay a little more," he said.