The Road '' to Revenue Innovation:

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The Road.. to Revenue Innovation
Potholes in the Roads of Municipal Finance
Future of Municipal Finance Study
Oklahoma Municipal League
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TOWNS CITIES Where rural and urban unite!

• Municipal government is where the rubber meets
  the road.
• Pave our streets
• Fight wildfires and crime
• Put water in the tap ( in the toilet)
• Remove our trash
• Prepare us for disaster

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THE BASICS U.S. City Revenues 2003
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THE BASICS Oklahoma Municipal Revenues 2004
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State sales tax limited impact Municipal sales
tax BIG IMPACT
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Overdependence on Sales Tax

• Erosion of sales tax base
• Internet/Catalog tax haven 20 billion est.
  2003
• Exemptions by State of Oklahoma
• 3 in 1965, 6 in 1980, 118 in 2005 and climbing
• Pressure for more deductions
• Grocery sales tax - 99 million in 99-00
• Sales tax holiday
• Diminished capacity - counties (60), schools,
  hospitals, economic development, colleges

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Increase in sales tax exemptions
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Increases in sales tax exemptions

• Exemptions are like

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Overdependence on Sales Tax

• Pressure for more deductions
• Grocery sales tax - 99 million in 99-00
• Sales tax holiday
• Diminished capacity - counties (60), schools,
  hospitals, economic development, colleges

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Overdependence on Sales Tax
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Overdependence on Sales Tax
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Overdependence on Sales Tax

• Diminished capacity counties (60), schools,
  hospitals, economic development, colleges
• Result Less sales tax for core services
  police, fire, streets, bridges, water,
  wastewater, parks

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THE BASICS Oklahoma Municipal Expenditures 2004
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Budgetary Potholes

• Biggest Problems
• Fuel/Energy, Price Increase
• Infrastructure and Capital Needs
• Cost of Employee Health Benefits

• Tools to Balance Budgets
• Increase Existing Utility Rates (Largest revenue
  source after sales tax)
• Cutback Operating Expenditures
• Reduced Capital Spending (long term contributor
  to infrastructure problems)

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Healthcare Costs/Wage Pressures

• 66 of Oklahoma municipalities list healthcare
  cost in the Top 3 budget problem
• 2004 Nationally - 14 increase, 20 drugs

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Problems with state/local partnerships

• Mandated Costs
• MECBA (SB2048)
• Constitutional Amend. Killing MECBA Win (SJR37)
• OWRB Fee Increase (100 per permit)
• Purchasing (prison industries bill)
• 4 Firefighters Health Contribution (SB1828)

• Take Away
• Grocery Sales Tax
• Sales Tax Holiday
• Sales Tax Exemptions (24)
• 1 Per Ton Landfill Fee (SB1548)

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Havent Shared

• Transportation Funds ? - double street and alley
  funds 24 mil
• Operation Firewall (16.5 mil)
• 1 Per Ton Landfill Fee (SB1548)
• Reimburse Losses from Mandates and Exemptions

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Transportation Funds for Towns Cities
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The Road.. to Revenue Innovation
Potholes in the Roads of Municipal Finance
Future of Municipal Finance Study
Oklahoma Municipal League