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One Eighth Percent Public Transportation Sales Tax

Overview

On November 12, Norman residents will have the opportunity to vote on a 1/8 percent sales tax to fund the City’s newly acquired Public Transportation System. If approved, this sales tax would replace Cleveland County’s expiring 1/4% sales tax in March 2020 and go to a dedicated City public transportation fund to fill a $2.2 million funding gap without raising current sales tax levels. 

With more than 350,000 rides given in 2018 (not counting OU students), it is clear many Norman residents depend on the public transportation system to get to work, run errands or even go to a doctor’s appointment. In July 2019, the University of Oklahoma transferred operations of Norman’s Public Transportation System (formerly known as CART) to the City of Norman. The cost to maintain and operate this bus system, not including the campus only routes that OU operates, is approximately $5.3 million. The City’s major sources of funding for the system are an annual $2 million grant from the Federal Transit Authority and a $1.1 million contribution from the General Fund, leaving a $2.2 million shortfall. 


Sales Tax Info

Norman City Council is asking residents to vote on a 1/8% sales tax to help fund public transportation on November 12. If approved this sales tax would go into effect at the same time as the current Cleveland County’s ¼% sales tax expires, effectively not raising current tax rates. 

An easier way to think of this may be in terms of dollars. The County's current sales tax amounts to 25 cents for every $100 spent in Norman. Council is asking voters for half of that or 12.5 cents. What this means for residents is that if the City's 1/8% sales tax is approved, then 12.5 cents of every $100 spent in Norman would go back into the community for Public Transportation needs. 

Over the course of a year, this would raise an estimated $2.5 million that would go into a special fund to be used only on Norman’s Public Transportation System. When added to the $2 million Federal Transit Authority grant the City will receive each year and a $1.1 million contribution from the City of Norman’s General Fund this sales tax revenue would cover the cost of operations and maintenance ($5.3 million) with about $300,000 left over for reinvestment in the system. That could be used for things like expanded services, improved accessibility or technology upgrades. 

How do you know this money will be used only for public transportation? Because it’s the law. If voters approve the ordinance on the ballot on November 12 then by law the City may only spend money raised from the 1/8% sales tax on public transportation systems or public transportation system related costs – such as office space, staff or bus storage space. Additionally, if the Regional Transportation Authority of Central Oklahoma funds public bus operations in Norman by any other means then, by the ordinance, this sales tax will expire. That means the City of Norman will only collect the 1/8% sales tax to spend on only public transportation needs for only as long as it is needed. 


Norman's Public Transportation System

Many Norman residents depend on the public transportation system to get to work, run errands or even go to a doctor’s appointment. In Fiscal Year 2019 (July 2018 to June 2019), 300,861 rides were given on fixed route buses and 32,412 were given by paratransit services for elderly or disabled residents. 

If you were familiar with CART’s system then you may know that since its transfer from OU in July the City of Norman has maintained that same level of service. That includes: 


  • Five local city routes with 115 unique bus stops;
  • One commuter route to Oklahoma City (costs split with OKC); 
  • One route to the Moore Social Security Office that runs twice weekly; 
  • Paratransit services that pick qualifying residents with limited mobility or other disabilities up directly from their homes. 


Currently, the buses run Monday through Friday from 7am to 10pm. As it continues to assess the needs of residents, the City hopes to make adjustments or expand services to connect more quality of life attractions and City services such as parks, libraries and shopping. 


System Financials

The cost to run Norman’s current Public Transportation System is about $5.3 million each year including operations, ongoing bus maintenance and fleet replacement. This is actually pretty lean when compared Oklahoma City’s $24.9 million system or Athens, Georgia’s (a city of similar population) $6.1 million system. And that’s just their cost to operate and does not include the millions of dollars in capital costs they spend each year. 

The fleet the City received from OU consists of two new large buses, four large used buses, 17 small used buses or vans, and five used supervisor vehicles. Each vehicle, aside from the two new buses, has an average of 200,000 miles on it and is in year nine of its 12-year useful life. This means maintenance and replacement is needed, with the average cost of a new large bus being $500,000. 

Let’s take a look at what that financial breakdown is. 



The City’s major sources of funding for the system are an annual $2 million grant from the Federal Transit Authority and a $1.1 million contribution from the General Fund. This leaves a $2.2 million shortfall that would be covered by revenue from the 1/8% sales tax if voters approve it. 





As you can see, this would leave an estimated $284,061 surplus to be reinvested in the system for things like expanded service, future office space and fleet maintenance/storage facility (the City is currently renting from OU) or technology and accessibility improvements. 

Ballot Language

Here what you can expect to see on the ballot on November 12: 

“Shall Ordinance O-1920-16 providing for the assessment of a sales tax of one-eighth of one percent (1/8%) accounted for in the Public Transportation and Parking Fund in addition to the present City and State sales tax upon the gross proceeds or gross receipts derived from all sales to any person taxable under the sales tax law of Oklahoma including, but not limited to, certain enumerated sales listed therein; providing for the purpose of the one-eighth of one percent (1/8%) to be used for public transit systems and other lawful purposes of the City related to public transit; and providing that one-eighth of one percent (1/8%) shall begin to be levied on April 1, 2020 and shall end only upon successful adoption and implementation of a dedicated funding source sufficient to fund public bus operations in Norman in furtherance of the purposes of the Regional Transportation Authority of Central Oklahoma be approved?”

That is a lot of legalese. Let’s break down what it actually means: 

  • Shall Ordinance O-1920-16 
    • This is naming the specific ordinance, Ordinance O-1920-16, that is being voted on. The ordinance is what, if approved, becomes law. You can read that ordinance here [hyperlink]. The rest of the paragraph is just a summary of exactly what that ordinance says.
  • Providing for the assessment of a sales tax of one-eighth of one percent (1/8%) accounted for in the Public Transportation and Parking Fund 
    • If approved the 1/8% sales tax revenue collection must be placed in a dedicated fund for use on public transportation called the Public Transportation and Parking Fund.
  • In addition to the present City and State sales tax upon the gross proceeds or gross receipts derived from all sales to any person taxable under the sales tax law of Oklahoma including, but not limited to, certain enumerated sales listed therein; 
    • If approved the 1/8% sales tax would stack on top of other City and State sales taxes for all purchases where sales tax applies.
  • Providing for the purpose of the one-eighth of one percent (1/8%) to be used for public transit systems and other lawful purposes of the City related to public transit; 
    • Revenue from the 1/8% sales tax (which would be collected into the Public Transportation and Parking Fund) could only be used for public transportation system (i.e. buses, operations of bus system, etc.) or for public transportation related costs (i.e. staff to oversee operations, office space, etc.) tax would stack on top of other City and State sales taxes for all purchases where sales tax applies.
  • And providing that one-eighth of one percent (1/8%) shall begin to be levied on April 1, 2020
    • Collection of the 1/8% sales tax would begin in April 2020 so that it coincides with the expiration of Cleveland County’s current 1/4 % sales tax and does not raise current tax levels.
  • and shall end only upon successful adoption and implementation of a dedicated funding source sufficient to fund public bus operations in Norman in furtherance of the purposes of the Regional Transportation Authority of Central Oklahoma be approved?
    • If the Regional Transportation Authority were to provide a differnt funding source for Normnan's public transportation system then this 1/8% sales tax would stop being collected. 



Important Election Dates
In order to vote on the 1/8% sales tax in the November 12 election, you must be registered to vote in the City of Norman. Here are some important election deadlines to know: 
October 18: Last day to register to vote in order to be eligible to participate in the November 12 election 
November 6: Absentee ballot applications are due to the Cleveland County Election Board by 5 p.m. 
November 7 – 8: In-person early voting at the Cleveland County Election Board from 8 a.m. to 6 p.m. The Board is located at 641 E. Robinson St. 
November 12: Election Day with in-person voting available from 7 a.m. to 7 p.m. at your local polling place. 
You can download voter registration forms or find your polling place at clevelandcountyelctionboard.com. 
Important Election Dates

In order to vote on the 1/8% sales tax in the November 12 election, you must be registered to vote in the City of Norman. Here are some important election deadlines to know: 
  • October 18: Last day to register to vote in order to be eligible to participate in the November 12 election 

  • November 6: Absentee ballot applications are due to the Cleveland County Election Board by 5 p.m. 

  • November 7 – 8: In-person early voting at the Cleveland County Election Board from 8 a.m. to 6 p.m. The Board is located at 641 E. Robinson St. 

  • November 12: Election Day with in-person voting available from 7 a.m. to 7 p.m. at your local polling place. 

You can download voter registration forms or find your polling place at clevelandcountyelctionboard.com.