The Tahlequah City Council agreed during a special meeting Tuesday, July 9, to set an election for a city excise tax.
If the half-cent sale tax is approved by voters, $1.5 million for current road and sidewalk repairs and improvements will be earmarked in a "savings" account.
Some members of the audience were concerned about the use of the money. Tahlequah Mayor Sue Catron reiterated that the funds are only to be used for construction, improvement, maintenance, operation and repair of city streets, alleys, roadways, bridges, sidewalks and public infrastructure.
"This is decades overdue for this to happen - the money that's spent on interest on these bonds. We can't have capital improvement without giving $1.5 million, $2 million to NSU, and this puts Tahlequah first and the taxpayers of Tahlequah," said citizen Phil Jones during open discussion.
As sales tax revenue increases, funds for projects will increase as well. The defined purpose of revenues is to make capital improvements provided for city projects.
"Unlike a bond issue, there is not a list of plans in mind. The idea is that our needs change as we progress," said Catron. "Our plan is to finish bond projects now - allow these funds to accumulate, and at that point, we are ready to begin addressing the next major need."
Ward 4 Councilor Trae Ratliff said when the city gets a bond issue, it receives a lump sum all at once. The city is projecting to have between $350,000 and $450,000 by the end of the first quarter in 2020.
The current sales tax will end in September, and the Oklahoma Tax Commission requires a 60-day notice following the election to begin the assessment, which will then be allocated to Tahlequah.
"They will only start a tax at the start of a quarter, so we will have a three-month period where this tax will not be there," said the mayor.
If the tax is approved, local residents will resume paying in January the same rate they pay now.
Ratliff said seven projects remain from the 2013 bond issue, and $4.7 million is left in the coffers.
"The .75 percent sales tax for the 2013 bond is set to fall off in a few years. [That would be] dropping it down to 8.75 percent or 8.25 percent, depending on how you vote on Sept. 10. Currently the city is 3.25 percent, county 1.75 percent, and state 4.5 percent. Clearly there is no room in our operating budget for new projects," said Ratliff.
The 2013 bond project had an interest expense of $7,490,205 and a principal of $24,455,000.
Ward 1 Councilor Bree Long said she was astonished when she saw just how much was spent on interest.
"I almost fell out of the chair I was sitting in; I could not believe that we spend that much money on interest on the bond projects. It's the past and we can't change the past, but we can change the future," said Long.
She made the motion to move forward with the tax proposal, while Ratliff seconded.
If approved at the polls, the sales tax is slated to begin Jan. 1, 2020.