7 minute read
Edmond Life and Leisure - October 31, 2024
McKinnis outlines support for bond measure
Editor
I am supporting the GO Bond election on all three ballot items because the time is now for Edmond citizens to invest in our infrastructure and our public safety and our quality of life to keep Edmond as the best community in Oklahoma. We must invest in our public safety, traffic solutions and safety for our children. We are all beneficiaries of the investments in Edmond by those who came before us, and I believe, we need to continue to invest in Edmond for the benefit of our generation and the generations that follow us. The GO Bond Task Force, which was made-up of 25 volunteer Edmond citizens, unanimously recommended the projects and the method of funding on the ballot. These were identified as being priorities for public safety, infrastructure and quality of life. The area getting the most funding will be roads, which is annually the subject of the biggest complaints by citizens of Edmond. What do we do to manage our traffic? The GO Bond program addresses that issue in a positive and efficient way.
Throughout its history, Edmond has funded its infrastructure and its operations solely by sales tax, and we are the only city, anywhere near our size in the State of Oklahoma, that does not employ a general obligation bond program to fund infrastructure by accessing some percentage of property taxes. We have the lowest sales tax rates in the OKC metro, and we are 17th out of 18 tax districts in Oklahoma County when it comes to property tax rates. We cannot continue to fund our public safety and infrastructure at the lowest rates and expect to have the highest quality of life, best public safety and thoughtful and safe infrastructure. The average Edmond property has tripled in value since 2000, and we have been the beneficiaries of the total City of Edmond experience. We owe it to ourselves to invest some of that benefit to fund the public safety, infrastructure and quality of life going forward.
There are some people that oppose the GO Bond program based on the argument we should not use property taxes, but we should be using sales taxes to fund any future infrastructure or quality of life or public safety needs. This places an unnecessary burden on the lower income earners in our community and the idea that housing affordability will be better served by adding sales taxes is simply inaccurate, and a convenient excuse.
There are numerous other reasons why property taxes are the appropriate method to fund the items listed on the GO Bond program.
Using sales taxes to fund the project list gives many of the largest infrastructure users and out of town corporate landowners a free pass and places a greater burden on Edmond citizens.
Choosing to raise funds by sales taxes will allow many large corporate out-of-state property owners to avoid paying for infrastructure improvements and public safety services that are beneficial to their businesses. Companies like Walmart, Lowe's, Home Depot, Chick-Fil-A and many others are owned by out-of-state interest, and the only direct contribution they make to the City of Edmond is at the time of paying for a building permit or connection or capacity fees. While they have employees who work there, we know 75% of all employees in the City of Edmond commute from outside the Edmond city limits every day to work. Therefore, those income dollars are leaving our city, and yet the infrastructure and public safety services are put under significant distress by businesses that benefit from it. Why would we ask our citizens to pay more sales taxes just to make up for what these companies aren’t required to contribute?
Sales taxes are much more volatile and more expensive to use as a financing method.
In any given year, sales tax collections in the City of Edmond have varied widely. Sometimes we enjoy large growth in sales tax collections, but other years collection rates are flat or even down. Therefore, it's a difficult revenue model to use for bond financing because of the higher interest rate pricing required in order to sell the bonds in the marketplace.
Ad valorem tax revenue is much more stable and allows for more reliable revenue projections and better bond pricing, which reduces the overall cost to taxpayers compared to a sales tax program. The cheapest way to fund these projects is by using GO Bonds backed by property tax revenue.
Property tax funding creates diversity of income for the City of Edmond. For the most part, the sole source of revenue for the City of Edmond is sales tax collections. By adding an ad valorem tax revenue to the city's revenue stream, it provides a diversity of income for the City of Edmond. Whether it’s a family household, business or organization, diversity of income provides greater financial stability. Additionally, every city in the State of Oklahoma with 50,000 people or more agrees with that concept, as Edmond is the only city of its size that doesn't use GO Bond financing paid for by ad valorem taxes as a revenue source. Why would you want diversity of income for your household or your business but think it's a bad idea for the City of Edmond?
Using ad valorem taxes is much more appropriate because the projects have a direct positive impact on the value of real property. Every project on the GO Bond project list enhances the quality of life of Edmond or addresses significant issues (like public safety and infrastructure) that directly impact property owners causing appreciation of property values. It is appropriate for those landowners to pay for those improvements. It is inequitable to have sales taxes be the sole methodology of paying for improvements in the City of Edmond when the direct beneficiary is the landowner.
Using sales taxes as they come in would cause projects to take longer to start and complete and they would be much more expensive.
If projects were only funded as sales tax collections come in, the ability to start projects, as well as the certainty to get them funded, would be much less of a clear path from start to finish. Therefore, projects would likely be delayed. From the idea phase all the way through the construction phase, projects would be subject to greater inflation and rising costs in all areas. Further, the likelihood of projects being completed would be dependent upon future annual revenues related to sales tax collections.
If sales taxes were increased to the level necessary to fund the GO Bond project list (an additional 1 ¼ cent), Edmond would have the highest sales tax rate in the OKC MSA at 9.50%.
Edmond currently enjoys the lowest sales tax rates and some of the lowest ad valorem tax rates in the Oklahoma City Metropolitan Statistical Area. If sales taxes were increased by 1 ¼ cents, which is the amount required to fund the GO Bond project list, Edmond would immediately become the highest sales tax district in the Oklahoma MSA. In the event you raised the ad valorem rate by 15 mills, Edmond would then become the 13th highest tax district out of 17 districts in OKC MSA. Why would you want to have the highest sales tax rate moving forward? If ad valorem taxes were used for the program, Edmond would still have the lowest sales tax rate in the metropolitan area and the ad valorem rate would still be significantly lower than the average in the Oklahoma City area. Notably, the proposed sales tax rate increase is 15.15%, and the proposed ad valorem tax increase is 14.42%. You cannot talk about housing affordability without discussing the cost of living, and adding a regressive tax to lowest wage earners would negatively impact housing affordability in every conceivable manner.
I am not generally in favor of taxes, and I realize there is never a good time for any tax increase. However, these needs are not going away, and in order for Edmond to continue to be the community we expect, the time is now to move forward with the GO Bond program. Please join me in voting “YES” on all three proposals.
Sincerely,
