By Conrad Dudderar
A sales tax or property tax increase.
These are the two primary options being studied to fund priority Yukon capital improvements.
The Yukon Capital Project Advisory Board will recommend projects and propose a funding method to the Yukon City Council, which will consider calling an election for this August or next January.
Members are looking at possible projects like a multi-generational recreation facility, sports park, third fire station, new library, street upgrades, and water/sewer infrastructure.
City of Yukon voters must approve any projects funded through an increase in sales tax or ad valorem (property tax) rates.
The Yukon Capital Project Advisory Board reviewed capital financing options during its April 14th meeting inside the Centennial Building, 12 S 5th.
A detailed presentation was made by Chris Gander, managing director of Oklahoma public finance for Bank of Oklahoma (BOK) Financial Securities.
Jim Falkner, of Rock Creek Road, told the Yukon Capital Project Advisory Board now is not the time to propose any tax increase in the City of Yukon.
“We have inflation that’s out of control … greater than when Jimmy Carter was our president,” Falkner said. “It’s over 10%. If you got a 10% raise at work, you’ve already spent it at the grocery store and the gasoline shop. You didn’t get a raise.
“This is not the time to be taking more money out of our citizens’ pockets to benefit a very few.”
Ward Larson, of W Olympic Drive, is opposed to a sales tax hike to fund new capital projects.
“Yukon has one of the highest combined state and city sales taxes of any of the cities in the metro,” he said. “Unfortunately, sales tax is the one tax that most dramatically affects the middle class and lower-income class.
“We’re not Nicholls Hills. We’re not Palm Beach (Florida). We’re Yukon, Oklahoma.”
Yukon’s overall sales tax rate is 8.85%.
Four of 14 municipalities in the Oklahoma City metro are higher, according to the Oklahoma State Commission:
Piedmont (9.85%), Midwest City (9.1%), The Village (9%), and Del City (9%).
Norman, Oklahoma City, Moore, Nichols Hills, Warr Acres, Bethany, and Edmond all have lower sales tax rates than Yukon.
El Reno and Mustang have the same rate as Yukon – 8.85%.
Yukon’s combined sales tax rate includes 4% collected by the City of Yukon, 4.5% by the State of Oklahoma and .35% by Canadian County.
The City of Yukon is projected to collect $26,456,292 in sales tax revenue in 2022, a 10.23% increase over the $24,001,902 collected in 2021.
Some $22.9 million was collected in each of the previous three years – ‘18, ‘19 and ‘20.
A 1% sales tax increase would generate an estimated $6.6 million in revenue based on the last 12 months, according to Gander’s presentation. A 0.50% sales tax increase would generate about $3.3 million in revenue.
If a sales tax increase is approved by voters, the City of Yukon could borrow:
- 1% Sales Tax: $55,250,000 over 10 years, $82,875,000 over 15 years and $110,500,000 over 20 years.
- 0.50% Sales Tax: $27,625,000 over 10 years, $41,437,500 over 15 years and $55,250 over 20 years.
- 0.25% Sales Tax: $13,812,500 over 10 years, $20,718,750 over 15 years and $27,625,500 over 20 years.
Another funding option is an increase in property taxes.
Yukon has one of the lowest assessed property tax rates (mill levies) among surrounding metro communities, Gander told the advisory board.
Nichols Hills (25.56), Moore (15.42), Oklahoma City (14.73), Warr Acres (12.27), Norman (12.10), Midwest City (9.44), The Village (8.90), Del City (4.69), Bethany (4.57), Yukon (3.41), and Edmond (0.00).
The City of Yukon’s sinking fund mill levy has dropped every year since 2007, when it stood at 15.43. If nothing changes, the mill levy will be 0.00 in 2026.
Most municipalities try to keep their mill levy around 15, Gander explained.
If approved by Yukon voters, a 10-mill levy would generate an estimated $21.54 million over 10 years, $37.62 million over 15 years or $57.48 million over 20 years in project funds.
Meanwhile, a 15-mill levy would generate about $31.32 million over 10 years, $55.47 million over 15 years or $84.62 million over 20 years.