Extend the 2001 Third Penny


On October 7, 1980, the City of Tulsa approved a one-cent sales tax for capital improvements to expire after five years. It was dubbed the "Third Penny," as Tulsa has a 2% sales tax to fund general operations. It's a pay-as-you-go tax -- money is spent as it comes in. The Third Penny tax has been renewed every five years since, most recently in May 2001. Below are the dates the tax was renewed and the term for which it was renewed.

April 9, 1985 -- December 31, 1985, to April 30, 1991
December 4, 1990 -- May 1, 1991, to July 31, 1996
February 13, 1996 -- August 1, 1996, to July 31, 2001
May 8, 2001 -- August 1, 2001, to July 31, 2006

Each Third Penny election establishes a separate fund, which may only be spent on the projects advertised to the voters prior to the election.

Nearly every previous Third Penny fund has run a surplus, which the City Council has allocated to unfunded capital improvements projects. That isn't the case with the 2001 fund. At a Council committee meeting on August 2, Finance Director Mike Kier reported a shortfall of $69.2 million, reflecting the downturn in the local economy thanks to the bursting of the telecom bubble. That means that nearly $70 million in basic projects -- streets and sewers -- that we've been waiting to have for five years won't get done by the time the tax expires.

The rule of thumb is that a one cent city sales tax will raise $60 million in one year. It would take about 14 more months to erase the shortfall and pay for all the 2001 Third Penny projects.

There are two options: The first is to lump any unfinished projects in with a full slate of new projects for another five year extension. Mayor Bill LaFortune seems to be headed in this direction, as he holds town hall meetings gathering public input starting tonight. This would mean only 80% of the new tax would go for new projects. There's a danger that new projects for the 2006 Third Penny would be funded and completed ahead of the carryover projects from the 2001 Third Penny.

Another danger of this approach is that it would mean that the Mayor and Council will be putting together this entirely new slate of projects in the midst of a mayoral campaign that will pit at least one sitting councilor (probably more) against a sitting mayor. The renewal election would probably be held at the same time as the primary or general election. It would be the first time that a Third Penny vote has coincided with a mayoral election. Bill LaFortune would be in an excellent position to manipulate the list of new projects to help him secure renomination and a second four-year term.

If a five-year Third Penny election coincides with the mayoral primary or general, it will mean that there won't be a major capital improvements funding package during the term of the new mayor. The general obligation bond issue we just voted on back in April won't be up again until after the 2010 elections. In the past, it's been the tradition to space the bond issue and Third Penny votes out by 2 years -- Third Penny in 1996, bond issue in August 1999, Third Penny in 2001. The bond issue should have been up again in the summer of 2004, but the Mayor's office delayed and delayed.

The least controversial way to move forward, the way that will guarantee that all 2001 projects will be completed as soon as possible, the way that is most likely to win the voters' approval, is to vote in February or March to extend the 2001 Third Penny for another 14 months. No new projects -- just finish what we started. The tax would then expire at the end of September 2007, plenty of time for the new mayor, with a fresh mandate from the public, to put together a new five-year Third Penny package which reflects the new mayor's priorities.

Here's the list of the Mayor's town hall meetings on the Third Penny. If you'd like to see a vote just to extend and complete the 2001 package, this is an opportunity to make sure the Mayor hears you. All the meetings start at 7 p.m.

Tuesday, September 6: Zarrow Library, 2224 W. 51st St.

Wednesday, September 7: Aaronson Auditorium, Central Library, Fourth and Denver, downtown.

Monday, September 12: Rudisill Library, 1520 N. Hartford Ave.

Tuesday, September 13: Martin Library, 2601 S. Garnett Road.

Monday, September 19: Helmerich Library, 5131 E. 91st St.

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This page contains a single entry by Michael Bates published on September 5, 2005 11:50 PM.

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