Apr. 8—Committee members expressed concerns about plans to create an incremental tax district to help finance the development of market-rate housing on Muskogee's east side.
A portion of the ad valorem tax revenue captured from the district would be used to fund the $1.5 million to $2 million costs of building out the infrastructure required by the construction of 120 new houses. Officials say that revenue stream would grow as new homes are built, sold and occupied.
Until the goals of the tax district are met or it expires because of time, school districts, libraries and other entities that rely on ad valorem taxes for annual operations would forgo a portion of that money up to 20 years. The special tax district would include a tract of land located along South Country Club Road, where first-phase construction of 40 houses commenced earlier this year.
Mayor Marlon Coleman said the TIF district is necessary to spur private development of new houses, which would help recruit new and expanding industries. He said many people who work in Muskogee commute because there is a shortage of market-rate housing here.
A recent analysis of the local housing market identified a need for the construction of 1,606 housing units during the next 10 years. University of Oklahoma researchers estimate another 2,150 are needed to replace the market's existing houses negatively affected by age.
While committee members seemed to agree about the need for new housing, at least two expressed concerns about the use of a TIF district to support residential development.
Muskogee Public Schools Superintendent Jarod Mendenhall said the district's annual budget relies a great deal on ad valorem tax revenue. Decisions made this year by state lawmakers and Gov. Kevin Stitt could make that revenue stream even more important in the future.
"Using this mechanism is not necessarily good for public schools — I base a lot of what I receive through ad valorem growth," Mendenhall said, saying it might make more sense to finance the work with a loan from the City of Muskogee Foundation. "You know I want rooftops, I want economic development, I want more students, but maybe we've got two or three things that are that are against us at this point."
Muskogee County Assessor Ron Dean also expressed concerns about the proposal, for which more details will be provided later this month. Dean said there are reasons for concern any time public funds are used to incentivize private business, so the risks and rewards must be assessed before venturing down that road.
"First of all, I think we've got to show that we're going to have a longterm residual positive impact on our community," Dean said. "If we are I don't think any of us will have a hard time wrapping our minds around something like this."
Dean said factors he considers important are increased opportunities for jobs in the medium- to upper-income range and whether creating the district would provide — or help provide — a service private industry is unable or unwilling to provide. He said such a district should not create an unfair advantage for a private developer.
City Manager Mike Miller said he heard some "good questions from smart people" during the committee's inaugural meeting. He said statistics show new housing starts in Muskogee lags numbers reported by other municipalities and agreed with Coleman that a special tax district is necessary "to achieve the goals" of growing Muskogee and improving the quality of life for its residents.