City administrators boosted revenue projections for the fiscal year after closing the second quarter with sales tax revenue outpacing both earlier estimates and year-ago totals.
Data compiled by the Oklahoma Tax Commission show the city received nearly $2.15 million in sales tax revenue in December. That represents a 1.36% increase from the $2.12 million disbursed during the same period in 2019.
December sales tax disbursements primarily represent local tax receipts generated by October business. Totals include taxes collected on actual sales reported by businesses required to file electronically from Oct. 16 to Oct. 31 and estimated sales from Nov. 1 through Nov. 15.
The agency disbursed about $154.65 million in sales tax revenue this month to municipalities statewide — that was down $4.83 million, or 3.12%, from the $159.48 million disbursed in December 2019. Counties that assess a tax on retail sales shared disbursements totaling $25.05 million and use tax revenue totaling about $4.96 million.
Muskogee County’s share of sales tax disbursements in December totaled $445,498, up 2.2% from the $435,687 it received for the same month in 2019. The December disbursement of use tax revenue into Muskogee County coffers totaled $69,157, up 14.92% from the $58,838 deposited a year ago.
City Manager Mike Miller said the upward trend for sales tax revenue is “much more positive” than the projections used for budgeting purposes nine months ago. He and other administrators projected a 10% revenue decline for the year based on the uncertainties posed by the pandemic.
“We were making our budgets in March, April and May, when businesses were closed down and it was a scary time — we weren’t sure what the future was going to hold,” Miller said, noting the unpredictability of the pandemic. “We made the best prediction we could …, but we’re about halfway through and we are seeing much more positive trends than we had projected.”
Miller attributed the upward trend to more people shopping locally and staying closer to home. That is due in part to the continued spread of the novel coronavirus but also the city’s partnership with Greater Muskogee Area Chamber of Commerce to promote local businesses.
“There are new businesses that I’ve seen crop up just here in the last few months — people boldly opening new businesses during the pandemic,” Miller said. “I think there’s opportunity to shop here, people are taking advantage of it, and you see that reflected in our sales tax numbers —we hope that continues.”
Sales tax deposits for the first six months of fiscal year 2021 have outpaced those recorded for same period a year ago. Totals for the first half of the fiscal year totaled $13.35 million, which represents a 6.46% increase, up $862,487, from the $12.49 million recorded during the first half of fiscal year 2020 — that was reported as the city’s best in more than a dozen years.
Muskogee also experienced an increase in December for its use tax deposits, which were up 2.68% when compared with deposits reported a year ago. December use tax disbursements to the city totaled $273,487, up $7,320 from the $266,167 deposited a year ago.
Use tax revenue, which can swing wildly from month to month, is generated primarily by purchases of out-of-state goods for in-state use or consumption. City councilors have directed up to $1.2 million of the 4% use tax collected annually be spent solely for economic development purposes.
Projected revenue from the 4 percent municipal sales tax — along with use and franchise taxes — make up just more than half of the city’s general fund. Most of the remainder is generated by fees on city utilities and fines assessed for municipal code violations.