Tulsa Vision 2025: November 2008 Archives

I happened to get a look at Sunday's Tulsa World, which I don't often do, and noticed the front page headline: "BOK Center pumps up tax revenue".

The implication of the headline is that the opening of the BOK Center in September resulted in a dramatic increase in local sales tax revenue over previous years.

But that's not what the story says. The story is that, for ticket, concessions, and souvenir sales for events held in September, the BOK Center remitted $428,498 in sales taxes to the Oklahoma Tax Commission. What we don't know from this story if how much of that represents new dollars coming into the City of Tulsa and Tulsa County from out-of-town visitors and how much represents the reallocation of the disposable income of local residents, who would otherwise have spent the money at other entertainment and dining establishments.

To get an answer to that, we have to look at another story in the same edition, in which we learn that Tulsa County's October sales tax check, generated by sales in late August and early September -- the first sales tax check that would reflect the BOK Center -- are up only 3.1% over last year at the same time. Receipts from earlier in the summer were up 12.6% (May-June), 7.4% (June-July), and 10.7% (July-August) over the previous year.

While sales tax receipts grew from $7.7 million to $8.4 million between July-August and August-September in 2007, sales tax receipts actually fell over the same period in 2008, from $8.6 million in July-August to $8.4 million in August-September.

What about the City of Tulsa, which owns the BOK Center? The August-September receipts were down 1.4% from the previous month, from $18.6 million to $18.3 million.

It's not conclusive proof, but those numbers would suggest that the BOK Center is not yet bringing new dollars into Tulsa.

(This webpage has the Oklahoma Tax Commission's monthly reports of sales tax payments to cities and counties, going back to 2002.)

As we drill down in the BOK Center story, we learn that the BOKarena finished its first quarter of operation over $500,000 in the hole:

For the first three months, the venue brought in $944,623 in income through rental and service charges, facility fees attached to tickets, food and beverage sales, and other sources.

While it amassed $1,573,096 in operating expenses during that same period, the building was not operational the first two months of the fiscal year.

We'll have a better idea whether the arena will make or lose money after the next quarter. The revised profit projected for the year is already lower than the original projection by almost $11,000.

Remember that the arena was justified in terms of economic growth for the City of Tulsa and the entire region. The impact should be measured by comparing sales tax growth rates for the city and county to the overall rates for the state and to historical trends, adjusting by any revenue that operation of the arena returns to or drains from the city coffers.

The BOKarena may yet bring in the promised growth -- although the experience of other cities suggests otherwise, and the lack of development near the arena isn't promising. Whether it does or not, the Whirled's story presented the initial numbers in a way that seems intended to make the public believe that it already has.