Future of Municipal Finance III

By Earl Gibson,2014-08-07 14:39
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Future of Municipal Finance III

    Municipal Finance Policy

    OML Future of Municipal Finance III

    Adopted January 7, 2009

    Some top priorities to provide stable long-term revenue structures for municipal governments-

    State-Municipal Partnerships: Encourage state and municipal cooperation to grow and strengthen Oklahoma. Aid towns and cities when the burden cannot be shouldered alone locally. For example:

    ; Increase REAP funding and similar programs to aid the small communities.

    ; Provide at least partial funding for state and federal environmental mandates

    on municipalities such as costly infrastructure improvements especially in the

    area of water and wastewater projects mandated by additional federal and

    state requirements.

    ; Provide start-up funds to develop shared expertise for small communities such

    as city managers and planners.

    ; Buffer local communities from the increasing burden of state fees, such as

    water testing and lab costs.

    Sales Tax Since Oklahoma municipalities are overly dependent on local sales tax for municipal operations, every effort should be made to assure that this revenue source supports local services including:

    ; Seek a legislative reallocation of state sales tax to municipalities for local


    ; Broaden the sales tax base to include services in line with the economic shift

    from goods to services in the economy

    ; Assure that the Oklahoma Tax Commission devotes resources to verify that

    all revenues due to cities are properly collected and equitably dispersed to


    o Encourage the state to adequately fund the OTC and provide auditors to

    determine that revenues are properly collected and dispersed.

    o Assure equitable assessment and distribution of revenue pass-through

    programs such as the alcohol tax, sales tax holiday reimbursement,

    tobacco tax, and motor fuels taxes.

    o Continue third party revenue recovery programs.

    ; Eliminate some current exemptions and only impose additional new sales tax

    exemptions when equivalent new funding sources for municipal governments

    are provided. Require that proposals for tax reduction or exemptions be

    accompanied by sunset provisions and studies of cost/benefit and fiscal impact

    to both the state and local governments.

    ; Do not support reduction or elimination of sales tax on groceries unless it is

    part of a comprehensive restructuring of the Oklahoma sales tax to provide a

    balanced and adequate revenue system .

    Ad Valorem Tax: Seek to re-establish municipal access to local property tax revenues to provide a more stable and balanced revenue base.

    ; Amend the Oklahoma Constitution to allow optional local ad valorem levies

    for municipal government or restructure local levies.

    Transportation: Seek additional state funding for municipal roads, bridges, and transportation needs. Several options exist including:

    ; Increase the portion of the motor fuels (currently 1.875%) and motor vehicle

    collections (currently 3.1%) revenues distributed to municipalities for

    transportation needs.

    ; Increase motor fuels taxes either as cents per gallon or as a percentage of

    price per gallon dedicated to municipal transportation needs

    General Municipal Operations: Broaden current statutes to allow local government to determine charges based on local costs and standards rather than through state or federal mandated rates. For example:

    ; Modernize business licensing statutes in Title 11.

    ; Allow local adjustment of court operations and costs

    ; Increase municipal percentage of utility gross receipts (Currently 2% in Title

    68, Art 26, Sec. 2601).

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