Midwest City calls for special election to raise sales tax rate by .75 percent for public safety and city services
By Jeff Harrison
Midwest City voters will be asked to approve a sales tax increase to hire more police and firefighters and fund city services.
The sales tax election is set for Oct. 10. If approved, people would pay an additional .75 percent in sales tax. It would raise Midwest City’s sales tax rate from 8.35 to 9.10 percent. The city currently receives 3.85 percent with remaining 4.5 percent going to the state.
The city council unanimously approved a resolution calling for the special election during Tuesday night’s meeting.
Midwest City currently has among the lowest sales tax rates in the metro, but would jump to the top of the list if voters approve an increase. Oklahoma City has a sales tax rate of 8.375, Del City recently increased to 8.5 percent and Choctaw’s is 8.75.
City leaders argued that consumers value convenience and location over sales tax rates.
Officials estimate the sales tax increase would generate about $6.47 million annually. If approved, the sales tax would be effective Jan. 1, 2018. The city would start receiving additional revenue in March 2018.
The proposed sales tax increase would be used for police, fire and the general capital outlay and operations. The police fund would receive the largest share with 42.6 percent. The fire fund would receive 28.88 percent with the remaining 28.52 percent for general government capital outlay and operations.
Officials say the sales tax increase is necessary to fund core services and build a healthy fund balance. The city had to transfer $925,000 into the general fund and use $350,000 to subsidize retirees’ insurance costs for the 2017-18 fiscal budget that began July 1. Sales and use tax represents about 76 percent of the city’s operating general fund and provides the greatest opportunity for addressing revenue shortfalls.
Councilman Pat Byrne, who is a retired Oklahoma City police officer, said he believes the sales tax increase is necessary, but questioned how it would be divided.
“Why is there such a gap between the police and others?” he asked. “I just want to make sure we’re not just taking care of one group.”
Tim Lyon, assistant city manager, said they utilized the recent studies of the fire and police departments as guides. The studies recommended hiring six additional patrol officers over the next three years and three new firefighters in 2019-20. The police department budget is also larger than the fire department and requires a larger fund balance.
Residents spoke in favor and against the sales tax election. Charles Thompson provided a brief history of sales taxes in Oklahoma before attacking the proposal. He argued that government needs to live within its own means and questioned the efficiency of the Midwest City government.
“I don’t trust the city council or the city of Midwest City to use this money wisely,” Thompson said. “I see it again and again and again. It’s got to stop. We cannot go to the well one more time.”
Craig Dawkins asked if the city has considered selling assets and what type of research was conducted to determine the impact of a sales tax rate increase.
Mayor Matt Dukes said market research shows that shoppers value convenience over sales tax rates. Henson said the city’s goal is to use assets to create the most long term benefit to the community.
“It’s in our best interest to find those users that are going to have an impact on the community,” he said.
Fred Hawk said the city needs to continue to raise awareness about shopping locally and work to receive sales taxes from online purchases. Bobbie Holland disagreed with Thompson’s assessment and said she and her family are strong supporters of the proposal.
“We need the taxes to fund Midwest City,” Holland said.
After about an hour of discussion, the city council approved the sales tax election resolution.
Midwest City’s sales tax rate has stayed the same since 2011 when voters approved a .4015 percent increase to fund upgrades to the water plans. The tax is set to expire in January 2025.