Lured details: City bites on mall proposal Lured details: City bites on mall proposal
The Oklahoman Editorial
Published: May 9, 2008
A municipal budget increase that's lower than the rate of inflation is emblematic of local government financing in Oklahoma. With the cost of labor and materials on the rise, and despite the need to expand services to a growing population, the city must make do with an antiquated finance structure that relies almost entirely on revenue from the sale of goods rather than services.
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A paltry 1.3 percent increase in the general fund budget for fiscal 2009 might lead some to question why the Oklahoma City Council is willing to spend $7.9 million to lure an outlet mall. The question is answered above: Revenues are almost entirely fished from sales taxes assessed on goods.
The outlet mall could generate $184 million in sales tax revenue. Some of that will be at the expense of existing stores, but most will not. And it will be paid largely by people from outside the city. Outlet malls tend to lure customers from a large area.
The city will pay for infrastructure improvements that mall developers say are needed. A similar move was done by Broken Arrow to entice a Bass Pro Shops location. Oklahoma City paid for a building to house Bass Pro's Bricktown location, with the promise of rent payments and new sales tax revenues.
While all this incentivizing goes on, the city budget is at a virtual standstill despite increases in the cost of doing city business — most particularly for fuel.
So goes the wheel of finance for local governments in Oklahoma — turning on sales tax receipts, slowing when consumers ease off on purchases and speeding up when times are good.
Two council members voted against the mall incentives. The majority agreed that when a proposal comes along that could increase sales tax revenues by nearly $200 million, they must fish or cut bait.
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Lurid does seem more appropriate (but then wouldn't go alng with their clever "City Bites..." Actually "City Bites" would have been a good place to stop (by City I mean City "Leadership")
Now, correct me if I'm wrong, but do you suppose the title of this was supposed to have the word "lurid" instead of "lured"? Seems to make more sense to me, especially with the tone of this editorial....
This theory assumes that this new outlet mall will create new shoppers out of thin air. The problem with this is that the shoppers at the new mall will, for the most part, just shop at the new mall instead of somewhere else. All that is happening is the sales taxes the city is assuming are going to come pouring in will just be moved from somewhere else. What good does it do that the sales taxes this new mall is supposed to generate simply are moved from the Wal Mart down the street. Don't get me wrong, new things are nice, but this city simply doesn't need another place to shop. Its like saying we need some new fast food restaurants.
"Oklahoma City paid for a building to house Bass Pro's Bricktown location, with the promise of rent payments and new sales tax revenues." And exactly how did that turn out? Wee the sales tax revenues even anywhere close to the promises? Seems I remember articles in this paper that indicated otherwise.
“The outlet mall could generate $184 million in sales tax revenue.... And it will be paid largely by people from outside the city..... could increase sales tax revenues by nearly $200 million.”
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Where do they make this stuff up? Don’t they read their own paper?
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Not one, but two previous articles:
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City council approves outlet mall incentives (May 6, 2008)
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“The city council voted 7-2 today to approve the incentive package for the mall, which is expected to generate about $3.9 million a year in sales tax.”
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“City staff expects about half the sales tax the mall generates to be new to the local economy, generated by people traveling from outside the city area to shop there.”
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Outlet mall expected to increase city tax revenue (May 7, 2008)
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“The city council voted 7-2 to approve the incentive package for the mall, which is expected to generate about $3.9 million a year in sales tax revenues.”
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“Oklahoma City’s budget for next year includes an expected $184 million from sales taxes.”
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“About half the sales tax the mall generates would be new to the local economy, generated by people traveling from outside the area to shop.”
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So, the editors here are just uninformed about the facts or are just plain lying ...OKC sales taxes for the WHOLE YEAR is $184 million (not the outlet mall which isn’t even off the drawing board yet)...It won’t LARGELY be paid by people outside the City (about a 50/50 split)....and won’t come even close to increasing sales taxes by $200 million (after the 50/50 split, the new sales tax revenue from the outlet mall will only be $1.95 million, but we are spending $7.9 million in incentives...for those doing the math that’s a LOSS of $ 5.95 million)
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