Muskogee’s contingency plan for a further downturn in sales tax revenues does not call for laying off employees, City Manager Greg Buckley said Tuesday.

Instead, the city would more likely take the increase in use tax revenues and convert it to cover city operations instead of using it for community development, Buckley said.

“Delaying construction on a remodel is much more palatable than not picking up trash or not being able to turn someone’s water back on,” Buckley told the City Council’s Finance Committee.

While sales tax revenues fell about $366,000 short of projections for the first quarter of this fiscal year, use tax collections showed an increase of about $328,000. Use tax is the money collected on goods bought out of state for use in Muskogee. It has been dedicated to the city’s derelict home demolition and its remodeling of older homes in the city’s core.

Buckley said he has no explanation for why it has increased.

About half of the city’s revenue comes from sales tax, which has declined because of the poor economy.

So far, the city has coped with that decline by postponing projects that can be delayed, by reducing its supply inventory and only filling personnel positions where absolutely necessary.

Those positions being filled are three police dispatchers, Buckley said. Eleven positions are budgeted, but only eight positions are filled. An additional three are being filled, still leaving three positions vacant.

Buckley said while the city’s revenues of $9.1 million for the year to date, exceeds its $8.2 million in expenses, the picture isn’t as bright as it might seem.

“To put it in perspective, that’s just over one week’s payroll,” he said.

Buckley is optimistic the economy will turn around and the city’s sales tax revenues will pick up during the holiday season.

Tulsa Mayor Kathy Taylor has expressed her support of a measure to be presented the state Legislature that would allow cities to assess property taxes for their general government operation. She supports the ideas because ad valorem tax revenues do not fluctuate as much as sales tax revenues in a sour economy.

Buckley said the idea deserves some consideration, but said there are negatives that go along with the positives.

Those include that property taxes in states that don’t have sales taxes are generally much higher than in Oklahoma.



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