Examining OKC’s Dedicated Zoo and Fairgrounds Sales Tax

The nature of revenue collection and expenditures for the OKC Zoo and the Fairgrounds is complex. Its complexity makes it ripe as a vehicle to create confusion and fear among the populace if discussion is limited to soundbites, brief quotations and

limited research. My anecdotal experience suggests that a significant majority of taxpayers in OKC are not aware that 1/8 of every penny of everything bought in OKC goes to a fund dedicated to the zoo (the vote to institute the tax having taken place some 22 years ago (by a count of 13,844 to 11,469) ) currently generating a surplus of $6.5 million annually or that 6/11 of the 5.5% hotel/motel tax goes to the fairgrounds. That lack of awareness alone would make the subject worthy of discussion.

Let me start by emphasizing that I, nor I believe, any other city councilor, would favor any action which would jeopardize the ongoing operations of the zoo. Our strong public investment has created a world class facility and improved the health and quality of life of our citizens as well as improved our knowledge and appreciation of animals.

Born and raised in OKC I remember the way the zoo used to be almost 40 years ago when I went with my parents and grandparents, or even 20 years ago when I would visit the zoo and attend numerous concerts at the amphitheater. The zoo of my childhood included the “ship” complex on monkey island whose concrete seems uninhabitable today especially with the heat. I much prefer the current status of the zoo to which I have held birthday parties for my three children (aged 10, 9 and 7) and with whom I have spent a great deal of time walking the grounds over the last 10 years. We especially love Halloween there.

The monkey exhibit of my childhood except that I only remember concrete without the water

Forgive the amount of numbers but I want to share with you my understanding of the current financial picture of the zoo. With good information we can have productive conversations and make better decisions. The finances are complex and have been difficult for me to get my arms around.

The improvements in the zoo have largely been made possible by the dedicated 1/8 cent sales tax passed by OKC voters in 1990. We took out revenue bonds after passage in 1990 to make substantial improvements, and by paying some $700,000/ year from the dedicated sales tax funds we will have those bonds paid off in full in a few short years. In addition, much more recently leaders of the zoo created a $30 million master plan, some of which has already been completed, again with the sales tax funds.

Last year, with the addition of some of these capital projects, the operating budget for the zoo was almost exactly $15 million while the revenue generated by ticket sales, group events, donations etc… was approximately $9.3 million leaving more than a $5.6 million dollar shortfall.

The amount generated by the 1/8 cent sales tax was $12.14 million (and is expected to increase another $350,000 to $12.49 million this year) producing a net surplus of $6.46 million.

Despite spending these surplus funds in the past few years on capital improvements, such as in the elephant and children areas, the zoo currently has a cash balance of $10.9 million. A year from now, therefore, the zoo would be expected to have some $17.36 million in cash in its account plus whatever nominal amount the almost $11 million is making in interest.

I take issue with the way the Oklahoman has presented this issue to the OKC populace because I believe there are several questions which we as policy makers need to at least examine and discuss and that this is not simply an issue of defunding the zoo in an abrupt manner and diverting the funds approved by the taxpayers towards other sectors of the budget such as our chronic shortage of police officers, poor condition of streets and inadequate transit system. The editorials from the Oklahoman (three in one week) which reduce complex issues to the politics of soundbites and trying to inflict political damage are demeaning to the people of OKC who deserve better.

Questions that I believe need to be addressed are the following:

1. The 1/8 cent sales tax for the zoo was passed 22 years ago and has no end point; at what point is such funding taken back to the taxpayers given that each year that passes sees an ever increasing number of those who voted for it now deceased and a growing segment of the populace was too young to vote or not yet born in 1990?

2. The hotel/motel tax, which is largely paid by visitors from outside the city and state, is currently 5.5% of which 6/11 goes to the fairgrounds for capital improvements. Given that the voters recently passed MAPS3 which allocated $50 million to the fairgrounds for capital improvements, does all of that money (many millions) still need to be dedicated to the fairgrounds or could some of those funds be used for the zoo or other capital projects?

3. Is 5.5% a reasonable hotel/motel tax to charge visitors? I believe the amount is low compared to many large cities and I’m not sure that raising the amount would have any effect on people traveling to OKC (I never look at a city’s hotel/motel tax when booking a reservation and I don’t think many people do). I am currently looking into the tax rate in regional cities to have a more formal comparison but we were at the lower end of average when we last increased our rate some 8 years ago.

4. With a surplus of $6.46 million and more than $17 million in cash at the end of this year, we will be well on our way to having paid off the entire $30 million zoo master plan in cash. After the relatively short period (2 years?) it takes to accumulate the cash to pay for the master plan, what do we then do with the more than $6 million dollar annual surplus? Our police chief has stated that we could be as many as 200 police offficers short and there are as many as 100,000 citizens of OKC without access to a car in one of the only major cities in America that has no transit system on Sundays (would cost some $1.3 million annually). Certainly there is no shortage of areas we could spend the funds or we could give some or all of the surplus back to the taxpayers. Or we could take on new capital projects for the zoo. There is no easy answer but at a minimum, it would seem an area worthy of discussion and should not be dismissed by the editors of the Oklahoman as an attempt at an abrupt and devastating defunding of the zoo. Let me define this question as stating that I am asking what to do with the surplus funds, not the $15 million annual operating budget which I do not believe should be decreased.

5. Not a question but I would point out that moving the revenue for the zoo from a dedicated sales tax to the general fund would not necessarily mean a reduction in funds. In fact, the City Council could increase funds if it wanted to. That being said, the dedicated sales tax has been incredibly effective which brings up my next point:

6. In 2010 the Association of Central Oklahoma Governments produced a study on how to accomplish a regional transit system between OKC and its many surrounding central Oklahoma cities. In that study, ACOG seemingly made clear that the only way to accomplish the goal of a regional transit system would be for all the cities to have a dedicated sales tax (approximately 3/4 cent would produce $100 million annually if all the surrounding cities participated). If we indeed are moving towards such a system, then what can we learn from the dedicated sales tax experience of the zoo and the fairgrounds? What components would we want to keep and what would we want to change? Would we want it to be open ended or would it have an end point like the MAPS one cent sales tax which is reapproved by the voters every decade or so?

7. As part of MAPS3 we are developing an intermodal transit hub downtown at the Sante Fe Station on EK Gaylord which ideally will be a place that all forms of transportation converge: cars, buses, streetcars, trains, bicyclists and pedestrians. There is ongoing discussion about reestablishing a rail line which runs from the Sante Fe station to the proximity of the zoo and is called the Northeast line or the “Adventure Line”. Some citizens are concerned that parking at the zoo complex can get overwhelmed at times resulting in people needing to use the racetrack parking lot. Perhaps such a line would help alleviate parking congestion and increase attendance at the zoo, especially from our out of town visitors (attending conventions etc…). Would that be a reasonable next capital project after completion of the master plan?

The front page story in the Oklahoman occurred two weeks after I made comments from council and ignored any mention of the fairgrounds. In the ensuing week there was no interest from the paper and a week later I had a conversation with the reporter about another story on Monday and he made no mention of it. Later editorialist Owen Canfield wrote two editorials critical of my comments regarding my deceased cousin (which I can no longer find on their website) in which I agreed in the comments section with a reader who felt my comments were taken out of context; which drew another editorial. At a time of numerous media requests regarding my cousin, I then received a text asking to “talk about the zoo in the next day or two” on Wednesday (without mentioning a story was being written) and then a voicemail on Friday indicating that a story was going to be filed in a couple of hours. The editorial board followed their story with:

Shadid is questioning the dedicated sales tax of 1/8th of a cent, hinting that it could be better spent on streets, for example, those things that make it easier to drive instead of walk. The Ward 2 council member has a reputation for going against the grain. We didn’t know he wanted to go against the giraffes as well.

Shadid’s anti-zoo tax remarks were made at a council meeting, but he failed to respond to multiple requests from The Oklahoman to elaborate.