MAPS 3 tax projections

[king183]

Does anyone know how the MAPS 3 tax projections were calculated to arrive at the dollar amount and time period they did? Specifically, does anyone know what economic base and growth projections were taken into account (e.g., we're using recession quarters as the base and predicting 2% growth each year)? We're seeing a gradual, somewhat-quicker-than-expected recovery in sales tax collections in OKC, from what I read in the news. Thus, it seems like the collection of the $777 million will arrive sooner than expected, if we don't suffer another economic downturn of some sort.

[Larry OKC]

Don't know what the formula was that the City used, but I did some quick-n-dirty math on my own and had I had posted this in a previous thread a while back...

From the City’s 2009 FY budget report (available for download at OKC.gov)

“By year-end, it is expected that Sales Tax growth for FY 2009 will come in at 1.7%, compared with growth in the prior three years of 4.0%, 6.0% and 6.9%. To put these years in perspective, the 10-year average for sales tax growth is 4.3%”

My reading of that is a yearly sales tax growth average = 4.3%.

According to page 553 of the 09-10 Budget report, the Ford tax brought in $34.056M in the previous year and a projected $82.576 for a total of $116.63M (for 15 months) or $93.30M/year but as noted, collections are multi-millions below projections so, taking the presumed amount of the Ford tax of $82.46M and adding the 4.3% figure in for the next 8 years, should result in:

2010 = $64.51M*
2011 = $89.71M
2012 = $93.57M
2013 = $97.59M
2014 = $101.79M
2015 = $106.17M
2016 = $110.74M
2017 = $115.50M

TOTAL = $779.58M or $100.59M/year

Even with the lowball shortfall starting point during the Ford tax year, that's almost exactly the City's $777M total ($100M/year) figure. Reportedly, MAPS 3 tax collections are several million ahead of projections thus far (don't have the exact number handy). Which is a good thing since we only have $17M budgeted for cost over runs (2.2%) and the City has stated projects typically average 8% over. Factor in that the original MAPS came in 47.75% more than what voters were told and we are already $40M behind on the Trails alone....

[king183]

Thanks, Larry. I knew you'd come through with something.

I also wonder what kind of population projections they were using. If OKC continues to grow nicely and the economy continues to stand above the rest*, I can see us hitting the $777 million mark much earlier than they thought.

*Companies moving jobs or HQs to OKC from other cities (Boeing, CR maybe, etc.), unemployment remaining low, a new outlet shopping center that should draw in millions in tax revenue from out of city shoppers, continued success of the Thunder, new apartments that may bring in residents who previously didn't live in the city; These are just some consideration I think the planner may not have completely thought about when they were making their projections during the recession. Then again, they're experts, so maybe they did.

[Larry OKC]

You're welcome (hope it helped). Ideally, you want to budget expenses liberally (on the high end) and revenues conservatively (on the low end). We can keep our fingers crossed that they did that. The City is excellent at projecting revenues over a long term collection period like we have with the various MAPS. The Mayor stated that they came within $2M of revenue projections w/MAPS for Kids. That is excellent. The Ford tax was an exception because the recession hit it at the wrong time (a 15 month tax that didn't have the advantage of time to even things out). It is the expense side where they have problems.