What is Vision 2025?
On September 9, 2003, years of hard work came to fruition as voters of Tulsa County approved a one-penny, 13-year increase in the Tulsa County Sales Tax for regional economic development and capital improvements. The package called “Vision 2025: Foresight 4 Greater Tulsa” was the culmination of a long and arduous effort to grow economic and community infrastructure for future generations. Empowered by citizens, Tulsa County’s Board of County Commissioners is now actively engaged in the execution of Vision 2025 projects. This site is designed to keep the public informed of progress in that effort. You are invited to check here often as each project moves forward and we work together to build a better community.
Vision 2025 Financial Information
As of August 2015, total sales tax receipts now exceed $640 million. August receipts were $5,475,305.31 for a fiscal year total of $10,930,232.29. In the month of August 2015, approximately $613,000 in project payments were processed for $572 million in Vision 2025 project payments to-date. Estimates indicate sufficient resources for all program expenses, and overall revenue collections are beginning to show growth leveling off. To date, projections continue to support the approved (second) surplus to the approved program.
It has been several years since the development of Vision 2025, the campaign, and ultimately overwhelming approval of all propositions by the voters of Tulsa County. As the Program Director for Vision 2025, we want to take a few moments to refresh a few things. Vision 2025 was actually 4 separate ballot questions, all of which were approved.
Vision 2025 Election Information
- Vision 2025 drew 128,676 votes (40.7% of registered Tulsa County voters)
- Prop. 1 – $350 Million, Boeing Incentives, passed 60% – 40% (This proposition did not go into effect.)
- Prop. 2 – $22.3 Million, American Airlines Incentives, passed 62% – 38%
- Prop. 3 – $395.8 Million, Economic Development, Education, Health Care and Events Facilities, passed 62% – 38%
- Prop. 4 – $157.4 Million, Capital Improvements, Community Enrichment, passed 60% – 40%
(Note that the $ figures provided above include the approved project totals and include the additional $45.5 million allocated to the Arena and Convention Center project.) Proposition one (1), while approved, was never collected because the industry it was tied to, Boeing, did not locate in Tulsa County. Revenue stream (sales tax) for Vision 2025 projects and the cost to deliver them are included in the remaining three voter-approved sales tax measures (propositions 2, 3 & 4). These combine for a total of $0.006 (six-tenths of a penny), to be collected through 2017. Approved by inclusion in the ballot provision and the underlying ballot resolutions (these are the instruments by which the Tulsa County Commissioners called for the vote and are downloadable from this site) are provisions for the advance funding of projects by the use of bonds. This was done in order to accelerate completion of the improvements for the benefit of taxpayers, and to reduce the potential for project failure due to rapidly increasing construction costs. Upon analysis the decision was made to utilize a combination of advance funding (bonds, i.e. low-interest loans) along with a limited pay-as-you-go approach in order to keep the costs of borrowing money as low as possible. The result was that Tulsa County (via the Tulsa County Industrial Authority) raised $463 million for rapid construction at a target interest rate of less than 4%. This interest rate over the life of Vision 2025 will produce significant construction cost savings, as the interest rate was substantially less than the rate of average construction inflation in the Tulsa market. ——————————————————————————–
Over time we receive many questions concerning Vision 2025 financing and share the following examples:
I heard there was going to be a $250 million overage. No, there is no projection that shows such a windfall for our community. To get to that amount would require dramatic growth in the sales-tax revenue, which is simply not anticipated.
I picked up a flyer at the 2009 TEA Party that said the County is collecting more than it should regarding Vision 2025 Sales Tax, is that so? No, absolutely not. The sales tax is being collected at exactly the rate and methodology approved by the voters.
Will there be an overage or surplus of Vision 2025 funds? Right now financial projections are very difficult. Our (local) economy is in uncharted territory that we have no historical model to utilize for comparison, so it is quite difficult to project. Right now it appears there will be sufficient funding for Vision 2025 to meet all obligations. Beyond that, until the economy stabilizes, we believe it is imprudent to make such projections concerning potential surpluses.
If there is an overage, what happens to it? In accordance with the Tulsa County resolutions, which called for the ballot, a procedure was put into place whereby the Vision 2025 Authority would develop reconditions for additional projects to the county commissioners for consideration. It is important to note that any surplus funds would be divided among the propositions, and that the projects they are used for would meet the criteria for the proposition.
Can the Sales Tax be ended and the bonds paid off early? Potentially that may be possible, but only partially. As written, and essentially voter approved, the Vision 2025 Sales Tax is duration-based (collected for a set period of time, like the City of Tulsa does with its capital improvements programs ), so an early cessation would essentially be against the will of the voters. In addition, the sales tax cannot be ended before sufficient funds meet all projects, and bond payment obligations have been fully satisfied.
What happens to the interest earnings on Vision 2025 money? No Vision funds (of any kind) are used to support any general government operations. All interest earnings are utilized for approved program expenses, primarily direct project costs, bond expenses (issuance and interest payments) and program administration expenses (cost to administer the program, proof the expenditures and provide reporting to the county commissioners, the Vision 2025 Sales Tax Oversight Committee, and the public via annual reports and other resources such as developing, maintaining and staffing the Vision 2025 booth at the Tulsa State Fair).
What kind of bonds are they? There are five separate issues of revenue bonds, rather than one large bond issue, in order to provide greater flexibility and an overall reduced cost. The interest and principal are being repaid with the majority of the proceeds from the Vision 2025 sales tax collections. The five bond issues include:
- Fixed Rate (the majority)
- Short-term Variable Rate (one release remaining)
- Tax-exempt (interest earnings to the bondholders)
- Non call-able governmental / municipal
The bonds earned AAA rating and are insured against loss.
What is the interest rate on the bonds? The target established in the financial plan was to have an overall interest rate of less than 4%, which has been met.
How can I buy some of these bonds? A common question, unfortunately the bonds were not made available to the general public and the majority of the bonds were purchased, at negotiated sale, by large institutions such as pension plans and mutual funds.
Has the economic crisis in the banking business affected Vision 2025? Yes, in both direct and indirect ways. Directly, sales tax receipts have declined from what was previously strong growth. Indirectly, there have been many issues such as the financial trustee having to move some funds from one institution to another because of a significant rating downgrade.