Oklahoma City's fiscal year 2024 is off to an impressive start, as revealed by the August sales and use tax report. The report, which combines collections from the last half of June and estimated collections from the first half of July, offers a promising outlook for the city's financial health.
The General Fund: The Lifeline of Day-to-Day Operations
The General Fund is the backbone of Oklahoma City's day-to-day operations, supporting critical services such as public safety, infrastructure maintenance and community development. Sales tax stands as the largest single source of revenue for the General Fund, with use tax coming in as the second-largest contributor.
Sales Tax Surges Ahead
General Fund sales tax collections for August hit an impressive $28.4 million. This figure not only surpassed the monthly projection by approximately $504,000 (1.8%), but also outperformed August of the previous year by $1.3 million (4.9%). These numbers indicate a robust and growing local economy, which is excellent news for the city's financial stability.
The fiscal year-to-date data paints an even brighter picture. General Fund sales tax revenue is currently running approximately 2.7% above the projection, accounting for roughly $1.5 million in additional revenue. Compared to the same period last year, the revenue has surged by 4.7%, equating to an impressive $2.5 million increase.
Use Tax: A Steady Performer
While General Fund use tax collections can fluctuate more than sales tax collections, the August 2023 report demonstrates its resilience. August saw use tax collections of about $7.9 million, slightly below the projection by $305,000 (3.7%). However, it's worth noting that this figure is still 6.6% higher than the same month in the previous year.
The fiscal year-to-date picture for use tax is also encouraging. Collections have exceeded projections by approximately 2.3%. Compared to the same period last year, use tax revenue has impressively risen by 7.5%, amounting to $1.1 million in additional funds.
Understanding Sales and Use Tax
Sales tax primarily originates from retail sales within Oklahoma City, while use tax is levied at the same rate on goods purchased outside the city but shipped or brought in. This includes online sales and equipment not readily available from local suppliers.
In most areas of Oklahoma City, the overall sales tax rate is 8.625%. Of every dollar generated from taxable sales, 4.125 cents contribute to the city's revenue. Specifically, 2 ¼ cents go toward the General Fund, one cent supports MAPS 4, three-fourths of a cent is allocated for police and fire services, and one-eighth of a cent benefits the Oklahoma City Zoo. The remaining portion belongs to the state.
During the August reporting period, the city collected a remarkable $62.7 million in total sales and use tax revenue. These robust revenue figures reflect not only a thriving local economy but also responsible fiscal management by the city. As we move further into fiscal year 2024, Oklahoma City can anticipate a solid financial foundation to support its essential services and community development initiatives.
