Oklahoma City may be in the “nascent years” of an economic transformation marked by widespread growth, an economist told the Oklahoma City Council on Tuesday.
Russell Evans offered three forecasts to council members who will set next year's spending priorities — pessimistic, baseline and optimistic — for growth in sales taxes.
The sales tax is the biggest single part of the city budget, and sales tax growth is an indicator of the city's overall economic health.
Evans' forecasts ranged from an increase of 2.6 percent to an increase of 7.1 percent for the budget year beginning July 1. His baseline came in at 4.4 percent.
Drawing on a gambling analogy, Evans said a bettor might take the “under” — pessimistic — or the “over” — optimistic.
“I would play the over,” he said, while acknowledging he might not plan around the higher figure.
Evans leads the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University. The city is paying the Institute $17,500 this year for its economic forecasting and modeling expertise.
Evans' presentation was part of a workshop for city council members who are beginning work on the fiscal 2014 budget.
Trends in personal income and manufacturing are positive, raising the question of how much better Oklahoma City could do if national economic performance improves, Evans said.
Further, the sprawling Interstate 35 corridor leads the nation in job growth among seven large U.S. economic regions, he said.
In an interview, Mayor Mick Cornett noted the risk to the city's prosperity from factors including the federal budget impasse and long-term reductions in military spending.
But Cornett said he was “cautiously optimistic” that growth would continue.
Oklahoma City is becoming a place where highly educated people want to live, he said.
“That's the secret of the 21st century economy,” Cornett said. “And we're investing in that heavily.”
City finance experts told council members they are projecting 4 percent growth in sales tax collections in fiscal 2014.
City departments have been asked to submit budgets reflecting a 1 percent cut in funding. The council is to receive a proposed budget on April 30. Following a series of meetings to discuss spending plans, the council is to vote on next year's budget on June 11.