Thursday, October 4, 2012
Sales tax revenue in Oklahoma City is continuing to grow at a level that is unprecedented in recent years.
Sales tax collections for September came in at 14 percent above projections, according to a city memo. The city already is more than $5 million ahead of where it expected to be in sales and use tax collections this fiscal year, which began July 1.
“Statewide, things are doing very well in Oklahoma right now,” city Budget Director Doug Dowler said. But Oklahoma City stands out even when compared to other cities. Oklahoma City’s year-to-date sales tax revenue growth rate of about 11 percent is second only to Edmond’s 20 percent among cities in the metro area. Tulsa’s growth rate is about 10 percent.
Oklahoma City saw similar sales tax revenue growth for a few months in 2010 after a large hailstorm devastated much of the metro area. But other than that period and one month that featured an artificially high number because of a change in the way cities reported sales tax revenue, Oklahoma City hasn’t seen anything similar in many years.
“Going all the way back to 2000, we had one month in ’06 where we had a 19 percent gain,” Dowler said. “Those are really the only times we’ve had growth like that.”
A hailstorm late this spring did contribute to some strong growth in construction materials purchases, but the financial impact of that storm was nowhere near that of the storm two years ago, Dowler said.
Economists have said the recovery from the global recession is over in Oklahoma, and the state has moved on to normal growth.
Oklahoma City budget figures show the city has almost recovered to the point it would have been had there been no recession at all.
The unemployment rate in Oklahoma is 5.1 percent, well below the 8.1 percent national rate, according to the U.S. Bureau of Labor Statistics. Oklahoma City has routinely had one of the lowest unemployment rates of any large city in the country in recent months.
“Our low unemployment rate makes a big difference with so many people working,” Dowler said. “They’ve got money to spend, and that shows up in the sales tax.”
But Dowler hesitated to predict growth for the rest of the fiscal year. If a deal isn’t reached, deep and automatic federal spending cuts could occur this winter, hurting the local economy.