Special Project - Fiscal Year 25 Budget Analysis

djacobs43
Sep 15
2 min read

Updated: Sep 30

Why the Office of the City Auditor (OCA) did this project

The Mayor's office asked the Office of the City Auditor to conduct an independent and objective review of the City of Tulsa's FY 2025 (July 1, 2024 - June 30, 2025) budgeted revenues and expenses, including sales tax rates for Tulsa and surrounding areas. The purpose was to evaluate how much revenue was needed to cover 100% of budget goals and to compare Tulsa's sales tax rate to surrounding municipalities.

Project Scope

Analysis of FY 2025 Budget General Fund and comparison of sales tax rates of Oklahoma municipalities.

How OCA did this project

Project Procedures:

Collect and review budgeted expenses and revenues for FY 2025
Identify and quantify unbudgeted financial needs and obligations
Compile comparative sales tax rate data from 14 surrounding municipalities to assess Tulsa's relative position

Key Observations

FY25 budgeted expenses exceeded budgeted revenue by an estimate of $15.2 million
Projected total for unbudgeted financial needs and obligations is $21 million

Budget Analysis

Budgeted Financials for FY 2025: Revenue: $393,647,000
Expenses: $408,898,000
Net Position: Expenses exceeded revenue by approximately $15.2 million
Unbudgeted Items with Fiscal Impact for FY 2025:
1. Costs that were unknown at the time the budget was being considered:
  Fire Department Compensation: Increases and fitness pay totaling $1,889,000
  Police Compensation: Increase totaling $844,000
  Legal Department Compensation: Increase totaling $624,000
  Other Pay: Increase totaling $159,000
2. Costs that the City would incur if stated budgetary targets were fully funded:
  Police Vacancies: Positions totaling $12,160,000 in costs remained unfunded
  Attrition Methodology: Ending the use of a 2% attrition rate would increase costs by $1,698,000
  Grant-Funded Positions: $3,693,000 in personnel costs are currently covered by federal grants
Sales Tax Rate Comparison (Selected Municipalities):
Tulsa's Current Sales Tax Rate: 3.65%
Rates in nearby municipalities ranges from 3.00% (Claremore) to 5.10% (Glenpool)
Multiple neighboring municipalities, including Bixby, Owasso, and Sand Springs, have rates above 4.00%
Tulsa's rate is at the lower end relative to regional peers

Conclusion

The City of Tulsa's FY 2025 budget reflects deficit spending of $15.2 million with more than $21 million in additional unbudgeted expenses and budgetary goals not included. Tulsa's sakes tax rate of 3.65% is comparatively lower than many neighboring municipalities. These findings provide context for discussions on whether revenues and/or expenses need adjustment to support fiscal sustainability.