To improve services and facilities, municipalities ask residents to vote and approve general obligation bonds (GO bonds) to fund large, public projects over multiple years. In most cases, the bonds are repaid over 20 years, though some may have terms of 5, 7 or 10 years.
GO bonds are repaid through property taxes (also called an ad valorem tax) that voters approve. It is a common misconception that property taxes help pay for the City’s core services. Although this is true in many states, cities and towns in Oklahoma are not allowed to levy property taxes for day-to-day operations.
Oklahoma is the only state where municipalities rely primarily on sales tax collections to fund city government operations. Sales tax revenues do not increase enough to fund additional major projects and needs. For instance, sales tax revenue for Stillwater was $28.5 million in 2015 and totaled $28.1 in 2020. Therefore, to address critical needs, cities turn to other funding options such as GO bonds.
GO bonds should not be confused with tax increment financing, or TIF, which is a public financing method that is used to support redevelopment, infrastructure and other improvement projects. TIF does not involve the creation of new or additional taxes. Rather it utilizes the “increment” of increased property valuation from new development as a financing tool.
Over the years, Stillwater has used GO bonds to fund a variety of projects that have improved city services and quality of life. In 2000, voters passed a $14.7 million GO bond to build the Stillwater Police station and remodel the Municipal Building. The 20-year bond is expected to be paid off in June 2021.
Previous GO bonds funded the Kaw Lake pipeline, upgrade to the library, new fire stations, and major projects to improve electric, water, sewer, airport, park and other services.
The City relies on citizen feedback to determine the details, projects and timing of future GO bonds. Citizen input sessions and surveys are an important part of that process. Citizen involvement is also essential. If you are interested in joining the Bond Citizen Committee, please email Becky at email@example.com.
Content last reviewed 04.23.2021