Indecision in Washington over the federal budget has the attention of Oklahoma City's financial managers.
The Oklahoma City Council heard Tuesday that sales tax collections grew only 0.2 percent in late December and early January, the holiday period marked by uncertainty over whether federal income tax cuts would be extended for middle-class taxpayers.
Now the sequester — automatic, across-the-board federal spending cuts — and expiration of the payroll tax cut are raising concerns about consumer spending. The city depends on sales taxes, based to a large degree on retail sales, to fund its budget.
“There's certainly some concern going forward,” said Doug Dowler, city budget director.
The city received nearly $34.8 million for the December-January period, up $65,000 from the same period a year earlier. Since July, sales tax receipts are up 6.9 percent.
Since 2010, sales tax revenues have been growing steadily.
City Manager Jim Couch said the latest report appeared to represent a leveling off in growth.
Tulsa sales tax receipts were down 3 percent in the latest period, while Norman was down 0.2 percent, Edmond was up 3 percent, Midwest City was up 14.4 percent and Moore was up 10.7 percent.
Couch said in a report to the council it is likely that new Dick's Sporting Goods stores played a significant part in sales tax collection growth in Midwest City and Moore.
The results highlighted the impact of consumer spending on city services. Sales taxes collected by retailers account for 62 percent of Oklahoma City sales tax revenues, Dowler said.
“As sales tax goes, so goes city revenues,” he said. “Making sure we have a solid retail base is very important.”
A projection for slowing sales tax revenue growth — the lowest of three scenarios offered recently by the city's economic consultant — is on the minds of city budget planners.
That figure was for 2.6 percent growth, far below expectations that sales tax revenues could grow in excess of 7 percent this year.
“The pessimistic scenario is probably more likely now that the sequester is occurring,” Dowler said. “The next couple of months will make a big difference as to what we can project for the coming year.”