Opportunity Cost: The Danger of Doing Something Rather Than Nothing

In the previous entry, I brought up the notion of the "opportunity cost" -- "the advantage forgone as the result of the acceptance of an alternative" -- and I applied it to the impact of the proposed sales tax increase on a typical Tulsa County family.

The same concept applies to the Dialog / Visioning Leadership Team as they consider their options later today. There are a lot of voices saying that we must do something, anything right now, or risk falling further behind competing cities. But there is an alternative worse than doing nothing right now.

Let's suppose that the County Commissioners put the current package to a vote of the people and it is approved in all its parts, imposing a one-percent tax on all sales in Tulsa County for the next 13 years.

Now think ahead five years. It is likely that the County would pledge this new tax stream to obtain revenue bonds, so that most of the money could be spent within the first few years to build the promised projects. So by five years, most of the money will have been spent, although we'll still have eight years left of collecting the tax.

If we get five years into this tax and it is apparent that this $877 million package has failed to ignite our economy, attract high-tech jobs, revitalize downtown, and make Tulsa The Place To Be, what options will we have? It will be politically impossible to raise taxes again to fund new projects that might be more effective.

This puts a huge burden on our elected leaders to get this package right, because if it passes, we have locked into this course for the next 13 years. Would it not be better to take another month or two, to invite some number crunchers and urban analysts to apply some healthy skepticism, to find out if the package can really deliver what we are all hoping for? I am prepared to nominate an international review panel who will provide us with some honest feedback. But I will do that in a later entry.