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Perry CFO warns sales-tax volatility, urges early planning for expirations and possible state ad valorem changes
Summary
The city’s CFO reported sales-tax collections are down about 7% year-to-date through March while use-tax tied to construction is up 36%, and urged council to begin planning now for a 2028 street-tax renewal and possible state action on property taxes that could shift revenue burdens to local sales taxes or utilities.
Russ, the city’s finance director, told the Perry City Council that year-to-date sales-tax collections through March are roughly 7% below projections while use-tax receipts—largely tied to construction—are up about 36% from the prior year. “Our sales tax deposit by itself is down 6% for the month. It is our lowest sales-tax collection month in the last 48 months,” Russ said, noting March reflects January collections and can be seasonally low.
Russ said construction-related use-tax remittances can swing materially: “Just looking at what we were receiving from those one-time payers… I think we’re down over $250,000 just in that line.” He cautioned the council that one-time construction receipts are not dependable year to year and that the city has budgeted conservatively as a result.
Beyond current collections, Russ urged the council to monitor state-level proposals to limit or freeze ad valorem (property) taxes, because those moves would not eliminate the underlying need for local revenue. “If the ad valorem tax freeze happens… there still has to be a funding source,” he said. “The only thing that would be available at that point would be sales tax.” Russ warned a shift in funding could increase pressure on sales taxes or drive higher utility rates, because the city currently transfers utility profits into the general fund to cover operations.
Council members asked procedural and timing questions about ballot measures. Staff reminded the council the street sales-tax renewal is scheduled to appear on the ballot in 2028 and that planning should begin well in advance—staff recommended at least 12 months lead time to prepare a ballot question and notify the Oklahoma Tax Commission in time to appear on election reports. One councilor noted setbacks in other towns where not starting early cost a community a temporary penny of sales tax.
Why it matters: Perry’s revenue mix relies heavily on local sales and utility transfers; sustained sales-tax weakness or state changes to property-tax structure could force the city to consider ballot measures, changes to rates, or alternative revenue strategies. The CFO advised building communications and a multi-year plan now so voters are presented with clear options before existing tax measures expire.
Next steps: City staff will bring sales-tax planning into upcoming budget workshops and timelines for any potential ballot question; the council also discussed tracking and communicating recent capital projects to show voters where prior sales-tax dollars were spent.
