A slate of budget cuts will come before the City Council for consideration on May 26, owing to a sales tax shortfall predicted as a result of the COVID-19 pandemic.
According to a press release from the City on Monday, Fiscal Year 2021 will see some significant budget cuts across the board.
The new budget, which begins July 1, 2020, is scheduled to be adopted in June.
For now, it seems that Police and Fire will each face a budget reduction of 3.3%, while the rest of City General Fund departments will face cuts of 11.25%.
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The shortfall faced by the City is a unique product of being a city in the state of Oklahoma.
Oklahoma is the only state in the union that explicitly excludes municipalities from collecting property taxes. Relying chiefly on sales tax collections leaves city budgets vulnerable to the elastic nature of the consumer economy.
Free Press reached Mayor David Holt via text message asking if there were any plans to find new revenue streams for the city.
“Cities have fought at the Legislature for decades to expand their revenue streams to include property tax for operations. I was the author of one of the most recent attempts shortly before I left. The Farm Bureau always successfully stood in the way,” Holt said.
He continued, “Without legislative action, our hands are tied. And even then, we would have to take anything to a vote of the people. In the timeframe we’re looking at here, none of that seems likely to play out. But I hope we can use this experience as another reminder of why reform is needed and we can go back to the Legislature (when they’re considering normal legislation again) and try again to set ourselves up for a better future.”
Holt said that the City is actively pursuing Federal support, and pointed out that just yesterday the President tweeted an endorsement for support of municipal finances.
What a budget cut of this size could mean for essential city services is yet to be seen, of course.
Free Press sent an email to City Manager Craig Freeman to ask about service slowdowns and whether a reduction in staff was foreseeable with the proposed budget cuts. We were directed to Doug Dowler, the Budget Director for the City.
Dowler offered insight into how the budget cuts work as a practical issue. He said that part of the budget process is to ask departments to propose the cuts they would make to reach target reductions the Budget office has set for them.
Dowler said that departments are working on those proposals now. Once the proposals are received, the Budget Office will begin working with the City Manager’s Office to set the proposed budget including the specific cuts.
“In terms of the impact on services from these cuts I can’t speak to specifics at this point since we haven’t received the proposals,” Dowler said.
“One change that has already been announced though, is from Parks and Recreation. They are planning to go from mowing in parks every two weeks to every three weeks. Other departments will assess how best to meet the reductions.”
Dowler explained that the impact will vary from department to department.
“Some departments will spread the cut out among all of their divisions,” said Dowler. “Other Departments may choose to focus the cuts in an area deemed less critical to protect areas that are more critical from significant cuts. With this level of cuts, we expect to see reduced service in many areas.”
“At this point, however, I can’t say what those areas will be and how significant the impact will be.”
Free Press asked Dowler if it was anticipated that there would be a reduction in staff for the City.
“We do expect a reduction in the number of positions at the City. In all funds and departments, the City has 4,869 authorized positions,” said Dowler. “We have several hundred vacant positions now and have a hiring freeze in place in order to save expenses and try to create more vacancies as we get closer to July 1.”
“We know we will see a significant reduction in the number of authorized positions in the Fiscal Year 2021 budget.”
Dowler continued, “Our Human Resources Department will work with individuals whose positions were cut to help them find a placement in a vacant position in the City.”
“In past years when we have faced significant cutbacks, HR has been able to place most of our employees and the number of people laid off has been very low. We are hopeful a similar situation will occur this year, but there is a good chance we will not be able to place every employee whose position is cut and that is difficult for all of us,” Dowler said.
The City Council will begin to hear budget proposals and details in the month of May with a new budget to be adopted in June before the July 1 beginning of the new fiscal year.