Budgets For Oklahoma Cities Could Be Hardest Hit In Country Due To Coronavirus

Cities across Oklahoma are poised to take a worse financial hit than anywhere else in the country due to the economic fallout from COVID-19.

That’s because Oklahoma is the only state in the country that ties city budgets so close to sales tax, according to mayors across the state.

“We've been left behind as the 50th state that still has this archaic funding stream that only allows for a sales tax to be used for operations,” Oklahoma City Mayor David Holt said.

“I don't know of another state in the country that forces its municipalities to deal so heavily with sales tax,” former Mayor Mick Cornett said. “And in times like this, when presumably sales tax is going to be down, it's going to impact important services like police and fire.”

In the most recent budget, sales tax made up 54% of Oklahoma City’s general fund. That’s compared to just 22% in the similar city of Ft. Worth, where they also use more stable property taxes.

As a lawmaker prior to becoming mayor, Holt authored a bill that would have allowed cities to use property tax on a limited basis and exempted farmland.

“It's never been able to get through the Legislature and it's always been the farm bureau that has stopped it,” Holt said. “It's been an unwavering stance and I would say a completely unreasonable stance.”

News 9 reached out to the Oklahoma Farm Bureau but did not hear back.

Gov. Kevin Stitt's office said he is open to a bill currently being considered by lawmakers that would allow voters to decide if cities could use property taxes for emergency services.

“We will always continue to hope and pray that the Legislature and the governor will eventually work together to give cities a more diversified revenue stream and allow us to have multiple legs to our funding stool,” Holt said.

He said it takes tax collections some time to get from businesses to the city. Holt said it will likely be another month before the city feels the effects of slowed economic activity. In the meantime, the city is working to make cuts.

“We don't want a situation where you're not getting your trash picked up or no one comes if you call police,” Holt said. “We think we will still be able to provide that core level of service.”

Beyond that, he said the city manager is working up a list of cuts.

“There's definitely, probably some things around the edges that we're going to have to take a hard look at and make some tough decisions,” he said.