ADA — The city of Ada showed a modest increase in sales tax revenue over the same period in 2005, according to the latest Oklahoma Tax Commission distribution report.
During a period between Aug. 16 and Sept. 15, Ada’s revenue from sales taxes rose to $1,043,614, compared to $1,032,116 a year ago.
The sales tax in Ada is 8.5 percent. Four percent is returned to the city from the tax commission, while the remaining 4.5 percent goes into state coffers.
There were also signs of economic gains in area cities like Coalgate and Allen.
The latest sales tax figures show that the economic picture in the Coal County seat is looking up. Coalgate’s take was $110,118 compared to $50,705 during the same period in 2005.
“One of the reasons why we’ve had the increase is that we’ve had a lot of drilling going on in our area, and those workers are purchasing items and paying sales taxes,” said Coalgate City Manager Roger Cosper. “We’ve got plans for those extra funds, but we’re not going to depend on them from now on. Everyone knows that the drilling could stop and the sales tax collections would fall.”
Doug Stinson, Allen’s city manager, is also pleased with the sales tax increases. Allen’s latest distribution was $12,720, more than $8,000 above the $4,633 received during the same period in 2005.
“We’ve been having increases for several months,” Stinson said. “There’s several reasons why our sales tax collections are up. Certainly, increased oil-field activity is part of reason. But our businesses in Industrial Park are also helping, and we’ve had several new homes built by the Chickasaw Nation and Tri-County. The increase is very important to small towns like Allen that depend on sales taxes for a major part of their financing.”
Statewide, Oklahoma’s economy continues to improve. Revenue collections increased for the 21st consecutive month, according to state Treasurer Scott Meacham.
Sales tax collections in 500 cities across the Sooner state rose about $10 million to more than $104 million.
Preliminary reports, Meacham said, show collections in the state’s general revenue fund totaled $474.6 million, $46.9 million above October 2005. Individual and corporate income tax returns totaled $209.3 million for the month, up $8.6 million. Gross production and motor vehicle tax receipts also had healthy increases.
Pontotoc County voters will decide on a 0.6185 percent (11/16th of a cent) county sales tax at a special election Dec. 12. If approved, retailers in Ada will collect on a sales tax rate of 9.185 percent.
Revenue from the county sales tax would be used to fund construction of a new jail and for courthouse improvements. A portion of the tax — 9/16th of one cent — would expire in 20 years or earlier if the bonds are paid off. The remaining one-eighth cent would be collected for upkeep of the jail. That one-eighth cent would be collected indefinitely or until it was repealed by county voters.
The county sales tax would be completely separate from the city’s sales tax.
According to Mark Bratcher, public information director for the city of Ada, the four-cent city sales tax is distributed by the following: One cent is earmarked for two city projects, Prop 1 and Prop 2; one cent goes to Valley View Regional Hospital; two cents goes into the city’s operating revenue.
Prop 1 is dedicated to infrastructure improvements. Three-quarters of one cent in sales taxes goes into this fund. Another quarter-cent of sales tax distributions goes into Prop 2 for economic development projects. Both five-year propositions were approved by Ada voters in 2002. Bratcher said he expected the two propositions to be on the ballot again in 2007.
Ada voters approved the controversial one cent sales tax increase to construct the “new” Valley View Regional Hospital in 1982. The tax survived legal battles between the city and the hospital over the length of the measure and is going strong after 24 years.
“It is the city’s understanding that the one-cent sales tax for Valley View Regional Hospital can’t go past 2014,” Bratcher said.
Bratcher said Valley View received $3.1 million from the one-cent sales tax in fiscal year 2005-2006.
Ken Johnson, a longtime local attorney and member of the Valley View board of directors since 1979, said the one-cent tax will stop if the hospital bonds are paid off before 2014.
Oklahoma operated without a state sales tax until the state Legislature approved a one-cent tax in 1933 to supplement schools during the Great Depression. An additional penny sales tax was added in 1936 to fund old age pensions and to provide assistance for blind and dependent children in conjunction with the federal Social Security program. The 2 percent sales tax was increased to 3 percent a few years later, and in June 1987 it was upped to 4 percent. The sales tax increased for education again in June 1999, the half-cent rise bringing it to 4.5 percent.
Ada retailers and those in other locations across Oklahoma began collecting sales tax in 1965 when House Bill 1118 authorized incorporated cities and towns to levy and collect sales taxes. In 1984, the state Legislature gave counties the authority to have a sales tax not to exceed 2 percent.
Pontotoc County has never had a county sales tax. That will change if voters approve the increase at the Dec. 12 special election.
Pontotoc County is one of six counties in Oklahoma that doesn’t have a county sales tax.
More than 50 percent of Ada’s retail trade comes from outside the city, said
Karl Burkhardt, economic developer for Ada Jobs Foundation.
Cities can also collect the so-called “use” tax, which is a tariff on goods purchased outside Oklahoma and shipped into the state. Examples are purchases made on the Home Shopping Network, a book order from Reader’s Digest or a CD from Columbia House.
The city of Ada collected $47,328 in “use” taxes, according to OTC’s latest records.
Sales tax collections, October 2006 report
Aug. 16-Sept. 15
(Source: Oklahoma Tax Commission)
City Tax rate Oct. 2006 Oct. 2005
Ada 8.5 $1,043,614 $1,032,116
Allen 7.5 $12,720 $4,633
Atwood 6.5 $513 $463
Bowlegs 7.5 $1,074 $1,151
Byng 6.5 $3,530 $2,790
Calvin 8.5 $3,900 $3,518
Coalgate 7.5 $100,118 $50,705
Davis 6.5 $48,290 $39,441
Francis 7.5 $1,240 $1,069
Gerty 6.5 $182 $900
Konawa 8.5 $28,045 $23,635
Pauls Valley 8.5 $299,698 $283,785
Roff 7.5 $6,910 $6,681
Sasakwa 8.5 $2,188 $826
Stonewall 8.5 $5,590 $5,047
Stratford 8.5 $28,057 $25,903
Sulphur 7.5 $121,379 $121,112
Tupelo 7.5 $1,875 $1,685
Wanette 6.5 $1,489 $1,119
Wapanucka 5.5 $5,396 $1,275