City of Edmond Faces Sales Tax Decline Due to COVID-19
Maury BlairThe City of Edmond is facing budget preparation challenges as a result of COVID-19, an official said in an email on April 18.
“Budget preparation is really challenging because we currently don’t know the impact that will occur in our sales tax collections,” said Steven Commons, assistant city manager for Administration for the City of Edmond.
The city’s sales tax rate is 8.25 percent, of which 4.5 percent goes to the State of Oklahoma. The remaining 3.75 percent is used to fund various city functions and projects, including public safety, parks and capital improvements, according to the city’s website.
“April sales tax distribution represented sales activity from the last two weeks of February and the first two weeks of March and represented almost a 1 percent increase over last year’s check at the same time,” Commons said.
The Edmond City council issued an emergency declaration followed by three amendments in the months of March and April, closing non-essential businesses and ordering residents to shelter-in-place, leaving home only to buy essential items or to work in essential occupations.
Restaurants, bars, gyms, theaters and other such businesses contribute significant sales tax revenue to the city.
The City’s fiscal year 2020 ends June 30, with fiscal year 2021 beginning July 1.
“We expect the May and June checks, which are our final two checks for our fiscal year ending June 30 to be significantly down,” Commons said.
Commons explained that cities in Oklahoma only receive sales tax revenues to fund general operations, unlike cities in other states that receive property tax revenue.
“The pandemic will financially affect Oklahoma cities much more because of our dependency on sales taxes,” Commons said. “This is a challenge we will have to work through.”
Sales tax revenues are an essential funding source for municipal governments in Oklahoma. However, Edmond recently reminded residents via Twitter of the importance of an accurate federal census in qualifying for federal funding assistance, such as roads, schools and public safety.