TULSA, Okla. — Tulsa Mayor G.T. Bynum will ask Tulsa residents next summer to vote on a property tax adjustment that will not raise property tax rates, but it will shift what the City of Tulsa does with the money it collects from ad valorem taxes. The shift will create a new permanent funding source for police, fire, and emergency services within Tulsa that isn’t dependent on economic conditions.
A new state law is now in effect that allows cities across Oklahoma to apply a small portion of their property tax collections to public safety purposes, but the vote must happen during a typically high turnout election in which 60 percent of voters vote yes for the approval of the either a new tax or change to their taxes.
“At some point every municipality across the state will have their own public safety district,” Bynum said. “It just depends on when they determine their next high turnout election will be. There’s no set date across the state for everyone to take this vote, but it’s something everyone has wanted for years.”
Bynum said the next high turnout citywide election would be in August 2022 when all nine city council seats are up for a vote, and that is when voters will be asked to approve a shift in how their property taxes would be spent.
Currently, property taxes collected by the city mostly go towards the repayment of bonds, many of which are used to fix streets. A smaller portion is also used to pay out any judgments, claims and legal settlements against the city. FOX23 is told though bond payments will be changed, road construction and maintenance projects will not.
Senate Bill 838′s passage is the first time Oklahoma cities will have a way to fund public safety without the use of a sales tax. Before SB 838′s passage this year, municipal governments across the state were only able to fund their operations primarily through sales tax. SB 838 allows for the creation of what are known as public safety taxing districts, and in Tulsa’s case, like it would be with many other cities, the entire city would be considered a “public safety district”.
“When the economy goes down, and we start to lose sales tax revenue, you don’t see sheriff’s deputies pleading for their jobs because they are funded through property taxes,” Bynum said. “But I’ll never forget being a new city councilor in the middle of The Great Recession seeing our first responders and their children and their families filling city hall chambers pleading for us not to lay them off, and there was nothing we could do for them because this city was not prepared for such a moment.”
Bynum pointed to the city’s still relatively new rainy day fund as a reason police and firefighters were not laid off when the economy slowed down in 2020 because of COVID-19, but by adding a new public safety property tax levy, there would always be a constant stream of money for police and fire.
SB 838 allows cities to use their public safety property tax collections (if approved by voters) to fund operations, equipment, and even certain capital projects. Bynum said salaries are a top priority with the money he hopes would start rolling in.
While many municipalities are expected to raise property taxes to obtain additional funding for public safety, Bynum is instead proposing a shift in how property tax money the city gets is spent.
“I’m thrilled that we found a new way to fund public safety without raising taxes,” Bynum told FOX23.
The city plans to adjust the amount of time in how long it takes back to pay back municipal bonds it issues with interest. Though extending the time they will need to pay back any newly issued bonds, the city is expected to pay an additional $13.5 million annually in interest. That interest will be paid for with the portion of the ad valorem tax that won’t go towards public safety and legal settlements.
“All we are doing is taking a little bit longer to pay off our bonds, but compared to what this city has historically done, we’re still paying off our bonds on a relatively quick time frame,” Bynum said explaining there will be no cutbacks in other departments to pay for the added interest costs.
Bynum told councilors that even with the added interest cost, the tax shift will be far more beneficial to public and be a seamless technical change that will bring major changes in how the city approaches public safety. While the tax shift wouldn’t prevent the city from laying off first responders ever again, Bynum said, between The Rainy Day fund and the tax shift, the likelihood of any future city leaders needing to make cuts because of revenue would be extremely slim, slimmer than it has ever been.
City of Tulsa CFO James Wagner said put to city councilors the following as part of Bynum’s presentation:
- A $150,000 house in Tulsa with a homestead exemption pays about $2,000 each year in property taxes.
- The City of Tulsa currently gets $340 each year form that collection.
- SB 838 allows for cities to collect five mills of ad valorem tax for public safety use.
- One mill in Tulsa is equal to about $15 each year.
- By shifting some property taxes to public safety, the city could collect $75 a year maximum on a $150,000 house.
- Once all property values and calculations are factored in, if the tax shift would take place the city would have an additional $80 million each year for public safety funding.
- The $80 million collected for public safety is not new tax money, but it is tax money shifted away from bond payments for public safety purposes. People were already being charged this amount. They are just being asked to authorize a change in how the city spends that money.
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