10. Find New Ways to Encourage and Fund Improvements

With cuts of federal aid to cities, sales taxes once collected in the city going to suburban municipalities and constraints on revenue collection by state law, the City of Tulsa local government is in a dismal fiscal situation.[95] Spending for public works, recreation and planning has been pared down with good reason to concentrate on public safety, which now consumes over two thirds of the City of Tulsa’s general fund expenditures.[96] The parks department, for instance, has lost more than 65 full-time employees in the last five years with many pools and recreation centers closed and shuttered. The city’s planning department is one quarter the size of those in comparable cities and the regional planning agency, INCOG, spends more money administering the Tulsa Area Metropolitan Planning Commission than it receives in revenue contributions from the city.[97] Tulsa cannot carry out the many aspects of a new comprehensive plan without healthy public works, parks and planning departments.

Tulsa needs to look for innovative funding sources which will almost inevitably translate into new fees or taxes to be paid by citizens and businesses. Raising fees and taxes or redistributing them is not popular. In many cases local ordinances and state law may need to be changed causing politicians to balk, but there is no free lunch if we want to create a better city and improve our quality of life.

The city already charges usage fees for much of its services including water, sewage treatment, waste removal, and airport landing rights; perhaps it is time to collect fees for driving on the streets. The fees could be collected in a variety of ways including a fuel tax, tolls, congestion charges or vehicle licensing.[98] Heavy, multi-axle vehicles cause more road damage than smaller, lighter vehicles, so fees would be based on vehicle size, weight and also emissions. This would encourage the use of smaller and more efficient cars and trucks with lower vehicle emissions while generating funds for street improvements.[99] Another approach to raise revenue for transportation and discourage automobile use would be to adopt an annual use tax on all surface parking spaces in the city, exempting only parking for residences and structured parking facilities.[100] Few citizens are likely to object to such a tax, since few have financial interests in parking and much parking is provided by businesses at no cost to the user. Furthermore, the competitive nature of the private parking industry and major retailers that provide parking may limit the amount they are willing to pass on to users. Revenue from the tax could be used to boost the city’s strained general fund, a portion of which could be directed to public parking development, public transportation and infrastructure maintenance.  Increased charges and collection of curb parking is yet another way to increase city revenues.

Another funding stream worth investigating would be a ten-cent surtax on all pre-packaged beverage containers sold in the city which could generate significant income. Half could be used for solid-waste disposal and recycling, while the other half funds public health, parks and recreation.[101]

Our property tax laws do not provide incentives for owners to improve their properties. Downtown property in particular is assessed highly due to the value of downtown land, yet many property owners do not make improvements and let properties deteriorate, leave buildings vacant or tear them down for parking. Improvements to properties should be encouraged and result in abatements or lower assessments.[102]

Redistributing property taxes regionally is another policy to consider. For instance, property in the City of Tulsa contributes 66% of the counties tax valuation yet the county does not share any tax revenues with the city.[103]Another approach would look at distributing revenues from new commercial and industrial projects in the region.[104] Residential development tends to consume more tax expenditures than it generates in revenue, while commercial and industrial development generates much more revenue then is required to service them.[105] Distributing the difference regionally would reduce competition between municipalities for these developments, promote fairness and ultimately lead to better planning of the region.

Another area of concern is maintaining property at a high standard and ameliorating nuisances, especially from rental properties. One approach here might be to require licensing of landlords that do not have their primary residence on the leased property or manage more than four dwelling units.[106] The annual licensing fee would fund random inspections of rental properties to make sure they meet minimum occupancy standards. It could also fund code enforcement efforts city-wide and help establish a fund for disadvantaged property owners that need aid to maintain their properties.

Notes

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[95] Tulsa’s municipal revenues and fiscal constraints prepared by Tulsa City Councilor Bill Martinson in 2007 : https://placesllc.wordpress.com/wp-content/uploads/2010/09/city-of-tulsa-revenues-and-fiscal-constraints-bill-martinson2.pdf .

[96] Ibid. Pages 3 through 9.

[97] The history and role of INCOG is available as a PowerPoint presentation made to the Tulsa City Council Planning Subcommittee in October 2008. See pages 6-8 for budget breakdowns: https://placesllc.wordpress.com/wp-content/uploads/2010/09/incog-tmapc-presentation.pdf .

[98] The National Surface Infrastructure Transportation Financing Commission in its March, 2009 report to congress recommended moving away from federal fuel taxes and adopting user pay systems on pages 5 through 10 of section one: http://financecommission.dot.gov/Documents/NSTIF_Commission_Final_Report_Mar09FNL.pdf.

Charleston, West Virginia charges a two dollar per week city service fee to all employees working in the city. The proceeds of the fee go exclusively to police protection and street maintenance: http://www.municode.com/resources/gateway.asp?pid=13013&sid=48. Wisconsin has authorized a motor vehicle registration fee now used by Milwaukee and Beloit which is used for transportation expenses: http://www.dot.wisconsin.gov/drivers/vehicles/title/wheeltax.htm. Lake Forest, Illinois also charges vehicle registration fees and charges higher rates for heavy vehicles: http://www.cityoflakeforest.com/cs/fin/cs_fin2b1.htm. San Francisco submitted a congestion pricing proposal for Doyle Drive to the U.S. Department of Transportation but has subsequently been withdrawn due to a lack of community consensus: http://www.sfcta.org/content/view/450/9/.

[99] Another approach to encourage efficient vehicle use might be a municipal short-term rental car system similar to the Zip Car: http://www.zipcar.com/?redirect_p=0.

[100] Todd Litman from the Victoria Transport Policy Institute discusses the two major forms of parking taxes, commercial parking taxes and per space levies in “Parking Taxes: Evaluating Options and Impacts”: http://www.vtpi.org/parking_tax.pdf. A number of cites have commercial parking taxes including Chicago, San Francisco and Pittsburgh. Pittsburgh’s commercial parking tax generates more revenue than any other revenue source for the city: http://www.city.pittsburgh.pa.us/finance/assets/forms/2007/07_PARKING_TAX_REGULATIONS.pdf. Vancouver charges $25 – $40 per space annually for non-residential parking: http://www.tc.gc.ca/Programs/Environment/UTSP/docs/casestudiesPDF/cs43E_VancouverParkingTax.pdf. The City of Austin has another strategy called a parking benefit district that installs meters in residential areas that have significant overflow commercial parking (similar to Tulsa’s Brookside and Cherry Street): https://www.ci.austin.tx.us/parkingdistrict/default.htm. For a comprehensive discussion see The High Cost of Free Parking by Donald C. Shoup printed in 2005 by APA Press.

[101] The American Beverage Association (understandably opposed to beverage taxes) reports that Arkansas, Washington, West Virginia and the City of Chicago have beverage taxes: http://www.ameribev.org/environment/deposits–taxes/. Chicago has an ordinance specifically for bottled water :http://egov.cityofchicago.org/webportal/COCWebPortal/COC_EDITORIAL/WaterTaxChange.pdf

[102] A number of property tax incentives are available in Baltimore including credits for building new dwelling units, rehabilitating vacant dwellings and making improvements to homes: http://www.baltimorecity.gov/government/finance/taxincentives.php. Harrisburg and several smaller Pennsylvania cities have taken a more radical approach using the concept of land value taxation to split the tax rate of land and improvements. In Harrisburg land is taxed at four times the rate of improvements which is an incentive to develop highly valued land: http://www.earthrights.net/docs/success.html.

[103] Reference pages 27 and 28 of the summary of Tulsa’s municipal revenues and fiscal constraints prepared by Tulsa City Councilor Bill Martinson in 2007 available at the City Council website: http://www.tulsacouncil.org/pdfs/R&PD/other_reports&presentations/City%20of%20Tulsa%20Revenues%20and%20Fiscal%20Constraints%20-%20Bill%20Martinson.pdf.

[104] Minneapolis, St. Paul and their surrounding communities coordinate growth through the Metropolitan Council: http://www.metrocouncil.org/. As elaborated on page 277 of Contemporary Urban Planning, 6^th Ed. by John M. Levy, the council increases intermunicipal cooperation by sharing property taxes from non-residential development. The New York Commission on Local Government Efficiency and Competitiveness has a report on the experience of Minneapolis-St. Paul and the New Jersey Meadowlands at: http://www.nyslocalgov.org/pdf/Tax_Base_Sharing.pdf.

[105] The American Farmland Trust conducts Cost of Community Services studies comparing the ratio of revenues collected to expenditures needed to provide public services to different land uses. They find the median value for commercial and industrial development to be $.27 expended for every dollar collected and the median value for residential development to be $1.16 expended for every dollar collected: http://www.farmlandinfo.org/documents/27757/FS_COCS_11-02.pdf.

[106] Kansas City adopted a residential rental regulation ordinance in 2007: http://cityclerk.kcmo.org/liveweb/Documents/Document.aspx?q=%2fl0OlX4EpG8FUeeMfLDPPcAb2TvJX%2btkndXjQ6%2fkglcHC6Kl6uOjQvSy3ngj%2bEgLrqMKVJhXsgdyE6pTO4pmOw%3d%3d. So far all rental properties in the city must register with the Office of Neighborhood and Community Services annually and designated neighborhoods are targeted for inspection: http://www.kcmo.org/neigh.nsf/web/rental_faq. Woodbury, New Jersey charges landlords a $100 annual license fee: http://woodbury.nj.us/cg_cs_housing_lic.shtml.