MAPS 3 collections ending $22M over $777M projection
OKLAHOMA CITY – The MAPS 3 temporary penny sales tax has already topped projected collections of $777 million and is heading into the sunset at the end of the year with an overage of more than $22 million, city officials said.
David Todd, the city’s MAPS 3 project manager, said a citizens oversight advisory committee has yet to determine how the additional money will be used. By law, it must go toward the goals voters approved in December 2009. Those projects include a new convention center, downtown park, streetcar system and Oklahoma River improvements.
When the penny sales tax comes to its end as the new year begins, it will be replaced with a three-quarter-cent sales tax that will last for only 27 months and a one-quarter-cent sales tax that will be permanent. The former will generate an estimated $240 million for street resurfacing, sidewalks, streetscapes and bicycle trails; the latter will generate an expected $26 million annually to support emergency services such as the hiring of police officers and firefighters.
At least that’s the best projections available for now. Things change, said Finance Director Craig Freeman.
Freeman is pleased projections for the third iteration of the Metropolitan Area Projects came as close as they did. Much like a meteorologist showing a tornado’s path across a map for television viewers, city staff had to fret about the likelihood of economic divergence with the passage of time. Circumstances could have just as easily resulted in a shortage, he said, as was the case when the city needed to finish construction on a practice facility and renovations to the Ford Center, now Chesapeake Energy Arena. That tax was scheduled to last only 15 months with $121 million but generated only $103 million.
Freeman credited the city’s Office of Management and Budget for preparing the original estimate. One word in particular kept creeping into his comments: conservative. City Hall played it safe, he said.
“I appreciate their conservative approach, especially on something like this,” he said. “So much of this depends on what happens in the economy.
“Right at the first, we were still feeling the effects of the recession, so we tried to stay conservative because we didn’t know how long things might drag on. You can expect that over seven or eight years, you’re going to see another downturn – which we did,” he said, referring to a drop in oil prices so important to Oklahoma’s tax base. “But then that downturn was something different from the national economic cycle as well.
“There’s no model that can tell you what will happen. You just have to look at past experiences and stay conservative,” he said.
The city won’t have a final accounting until receiving disbursement checks from the state Tax Commission through the first part of February. Freeman said the estimate of $22 million over is also conservative for the holiday gift shopping season.