The Finch Formerly Known As Gold

13 October 2007

Going it alone

In my own postmortem on the Tulsa River Tax, I offered this notion:

I still fail to understand why this was considered a county project when only a single municipality would benefit.... Perhaps Tulsa city government should have undertaken the project on their own — but then that would have required them to pay for it on their own, rather than hit up the suburbs for part of the bill. (Reminder: Oklahoma City's original MAPS package was financed by a city, not a county, sales tax. Further reminder: Oklahoma County's sales-tax rate is 0. Zero. Bupkis.)

Stan Geiger expands on this premise:

It was a clear strategic mistake, from a political standpoint, to make the river tax vote county-wide. The majority of people living in the burbs were opposed to paying a tax to fund a project they viewed as having no benefit for them. But I imagine the decision to go county-wide was less a political decision and more an economic decision.

Our metro area is a tightly-packed conglomeration of several municipalities. Tulsa sits in the middle. If sales taxes are hiked in Tulsa without a corresponding increase in tax rates for the surrounding cities, people will go to the surrounding cities to shop or dine out. Ergo, a unilateral tax bump in Tulsa could well backfire, dropping sales tax collections in total.

That logic works both ways, of course. If Broken Arrow bumps its sales tax to a level higher than its bordering communities, shoppers and diners will flee Broken Arrow for the cheaper confines of those adjoining communities.

It's not an inexorable law, of course. There are some things you can get in the city that you can't always get easily in the burbs. And it's got to be a fairly substantial purchase to make that much of a difference, I suspect: when I acquired the palatial estate at Surlywood in 2003, I ordered new appliances from Sears — from the Midwest City store, because (1) I'd been shopping there since I'd moved out east in the early 1990s and (2) the tax rate was 0.875 cent less. In that order, I think. And even then, the total tax savings came to well under twenty bucks. Of late, about the only time I need to shop outside Oklahoma City limits is when I make a pilgrimage to the New Balance store in Edmond. (Total sales tax in Edmond is 7.75 percent, versus 8.375 in Oklahoma City; on a hundred-dollar pair of shoes, we're looking at 63 cents, a bit less than what I'd spend for the gas to get there and back. I might think differently if I lived, say, north of 122nd.)

So these effects are real, but probably not so pronounced. And I'm not so sure that this wasn't primarily a political decision: Tulsa county government, at the time, probably had better (or at least "less bad") credibility than Tulsa city government, which in recent years has rivaled the Keystone Kops for comic ineffectuality.

Posted at 2:31 PM to Soonerland