Tax Time

Drone image of NW 11 and Hudson intersection and Elk Valley Brewing at 1212 N Hudson. David Morris | The Oklahoman

Tax time

A penny sales tax could fund the $978 million
MAPS 4 projects, but how much will it cost consumers?

MAPS 4 projects are expected to cost taxpayers $978 million — a record amount for a MAPS initiative — and the total collections could be even more.

The fate of the project rests with voters who must decide if the 16 projects associated with MAPS 4 are worth such a cost. But how is that money raised? Who pays for it? And how does this compare to past MAPS projects?

Understanding the answers to all these questions can help a voter decide whether or not to support the tax on the Dec. 10 ballot.

This story is the second part in a multipart series examining MAPS 4.

PART 1: MAPS 4 brings new projects under old format

Click here for more MAPS 4 coverage by The Oklahoman

How the money is raised

MAPS projects have always raised funds through a 1-cent sales tax on items sold in Oklahoma City, and MAPS 4 is no different.

The city’s current sales tax rate is 4.125%. This means for every dollar you spend on an item that is subject to sales tax in Oklahoma City, you pay a little more than 4 cents extra that is allocated for four purposes.

One of the four purposes currently is a 1-cent tax allocated for street improvements. Since the tax is assessed at a rate of 1 cent for every dollar spent, it is also sometimes described as being a 1% tax.

This tax is set to expire this spring, but would effectively be replaced by the MAPS 4 tax if the project list is approved by voters. This means citizens would see no overall change in their city sales tax rates. This 1-cent tax would be extended by an additional eight years for MAPS 4.

One cent might not seem like much, but city officials believe this 1-cent tax is enough to raise the full $978 million needed for the MAPS 4 projects. In fact, $978 might be a conservative estimate.

“Our finance department does a projection,” MAPS 3 Program Manager David Todd said. “There’s so many variables. You could go through a recession in that time, so they take a very conservative look based on trends.”

MAPS projects are completed after the money is collected in order to avoid taking on construction debts.

Oklahoma City sales taxes also include a three-quarter cent tax dedicated to public safety, a one-eighth cent zoo tax, and a 2 1/4 cent tax for the general fund. These tax amounts and allocation purposes are not subject to change, regardless of the outcome of the MAPS 4 vote.

Other sales tax collected on purchases, including state and county tax rates, would not change.

How much will it cost me?

While MAPS 4 projects are intended to benefit the entire city, it will cost individuals different amounts.

Sales taxes are paid by individual consumers every time a purchase is made and a sales tax is added. Each purchase is subject to the same 1-cent tax rate under the MAPS funding model, but how much an individual contributes depends on how much he or she spends on items subject to sales tax.

Sales tax is levied on items ranging from food and groceries, clothes, toys, office supplies, household goods, furniture and more. It’s sometimes described as a tangible tax on products you can hold and touch, as opposed to others, such as property taxes or income taxes.

One benefit is everyone pays sales tax and every citizen would contribute to MAPS 4.

It also would leave the current sales tax rate unchanged if passed, and would not necessitate a tax increase.

“You don’t pay a single dime, or in this case penny, more than you do today,” Oklahoma City Mayor David Holt said.

The mayor also cited the benefit of receiving some revenues by non-Oklahoma City residents. Anyone who visits Oklahoma City — whether they come from not-so-distant lands like Edmond, Yukon, Norman or Midwest City; other states or other countries — contributes to the tax every time they shop in city stores, buy tickets to concerts and Thunder games or go out to eat.

However, the tax is regressive in nature as lower income families spend a larger percentage of their income paying sales taxes.

The best way to estimate how much MAPS 4 would cost you is to estimate your family’s monthly expenses on items subject to sales tax and enter the amount into The Oklahoman’s MAPS 4 cost calculator.

What will you pay?

The Oklahoman’s MAPS 4 cost calculator can help you estimate how much of your sales tax would be allocated to MAPS 4 if the project is approved. Enter in an estimated monthly amount spent on items subject to sales tax — things like groceries, clothes, home supplies, decorations or other tangible products — to see how much MAPS 4 could cost you over the next 8 years.

Monthly Expenditures: $

Monthly cost: $

Annual cost: $

8-year cost: $

Your percent of total cost: %

For example, if an individual or family spends $1,000 per month in Oklahoma City on goods with a sales tax — for items like groceries, toys and clothes for kids, office supplies and home decorations — you would be charged an additional $86.25 per month in sales tax.

Of that amount, $45 would be for state sales tax collections, while the remaining $41.25 would be for Oklahoma City sales taxes. Additional county taxes would also be collected if purchases occurred in Canadian County or Cleveland County.

Breaking this amount down further, $10 of the Oklahoma City sales tax would go toward MAPS 4.

In this hypothetical situation, this individual or family that spends $1,000 per month on items subject to sales tax would contribute nearly $120 annually toward MAPS and about $960 over the course of the eight-year lifespan of the tax.

Real journalism. Real local impact.


That may or may not seem like much. But for perspective on the overall MAPS 4 amount, the $960 contributed by that individual represents about 0.000098% of the total project.
If MAPS 4 is not approved by voters, the 1-cent tax would be removed and the individual with a $1,000 monthly budget for those kinds of goods would save nearly $10 per month, $120 per year and about $960 over the next eight years if the tax rate remained the same during that time.

Past MAPS projects

MAPS 4’s $978 million price tag is the most expensive of all four MAPS projects.

Structured at the same 1% rate, for nearly the same amount of time, the city simply has reason to believe it will collect more this time around. This is because economic activity throughout Oklahoma City continues to increase over time.

Each MAPS tax in the past ran for a set number of years and expired after that time. Oklahoma City residents may remember other 1-cent taxes, including the current Better Streets tax, that were approved in the past 20 years, though they weren’t officially MAPS taxes.

Each MAPS edition collects revenues through the tax, but they also collect interest on funds while waiting to be used. As a result, there is often additional money available for use. The Oklahoma City Council decides how any additional money is to be spent, though it is supposed to be used for MAPS-related projects.

“MAPS 2 added some extra projects,” Todd said. “And then we’ve been very fortunate with MAPS 3 to have extra collections and interest.”

The original MAPS was projected to raise $350 million. It eventually raised $363 million, though a six-month extension was added in order to collect enough to cover additional expenses for some of the projects.

This project raised the funds that allowed for the construction of Chickasaw Bricktown Ballpark, the Bricktown Canal, Chesapeake Energy Arena, work at the Civic Center Music Hall and Cox Convention Center, and more.

MAPS for Kids was projected to raise $540 million. It eventually raised $579 million and provided construction, transportation and technology projects for Oklahoma City Public Schools.

MAPS 3 was projected to raise $777 million. So far, it has raised more than $832 million, which is being used to build the new convention center, Scissortail Park, the Oklahoma City Streetcar system, some senior health and wellness centers, Oklahoma River improvements, and more.

The $978 million MAPS 4 proposal includes city park improvements, new youth centers, affordable housing, a new multipurpose arena for the OKC Fairgrounds, a new multipurpose stadium for sports and outdoor events, and more. Actual collections remain to be seen, and won’t be known until the project is completed if approved.