Breaking Down the Budget: Revenue Forecasting

Every year, the City of Tulsa prepares a budget that reflects not just numbers, but planning, projections and priorities. Behind the scenes is the award-winning Finance Budget Division, a team that uses data and forecasting to help elected officials make informed financial and performance-based decisions. While they don’t have a crystal ball, their tools and expertise come close. 

Forecasting is done on the City’s major revenue accounts such as sales and use taxes, franchise taxes, and hotel and motel taxes.

Here are the highlights from the team’s latest financial update: 

OVERALL TAX REVENUE 

• The total forecasted for fiscal year 2026 is $471.2 million, up 1.6% from the fiscal year 2025 current estimate 

SALES AND USE TAXES 

• Sales Tax: Forecasted to grow by 1.75% in fiscal year 2026 and 2% in fiscal year 2027 

  • Sales tax receipts of $354.18 million are projected in fiscal year 2026, which is a 0.4% increase from the fiscal year 2025 original budget 

• Use Tax: Forecasted to grow by 2.25% in fiscal year 2026 and 2.5% in fiscal year 2027 

  • Use tax projection is $76.76 million for fiscal year 2026, which is an 11.1% increase from the fiscal year 2025 budget 

• Use tax continues to outpace sales tax as shopping preferences change 

• Forecasts from Moody’s Analytics financial service and the U.S. Federal Reserve support these trends

Information on economic drivers and indicators, such as the health of key industries and income statistics, helps predict the consumer spending that leads to sales and use tax collection. Data from Moody’s Analytics, highlighted in red, supports the forecasted growth in the tax base from the U.S. Federal Reserve. 

Population growth has trended upward from 2020, indicated by the red line. As the population grows, the opportunity for sales and use tax expands. Most of Oklahoma’s population growth continues to come from Texas and California.  

ENTERPRISE REVENUE 

• Enterprise revenue comes from charges for using utility services that include water, sewer, trash and stormwater 

  • Water: The sale of treated water is expected to generate $137.6 million in fiscal year 2026 

  • Sewer: The treatment and disposal of wastewater is charged to both commercial and residential sewer customers and is projected to be $161.6 million in fiscal year 2026

  • Trash: Revenue is generated from charges on trash collection and disposal and is projected to be $40.6 million in fiscal year 2026 

  • Stormwater: Fees charged to Tulsa landowners for the operation and maintenance of the City's storm drainage facilities are projected to generate $55.9 million in fiscal year 2026 

• Revenues are based on rate models from the City’s utility departments’ subject matter experts and calculate the revenue needed to maintain services 

• All revenue collected goes to cover the cost of service for each utility and cannot be diverted to other City programs and efforts 

• The City of Tulsa does not, and cannot by law, make a profit on utility rates 

Read more about proposed utility rates here. 

FRANCHISE FEE REVENUE 

• These include fees collected from Oklahoma Natural Gas (ONG), Public Service Company of Oklahoma (PSO), Cox Communications, AT&T, Trigen, and other users of the City of Tulsa right-of-way 

• The total forecasted for fiscal year 2026 is $30.3 million, up 6% from the fiscal year 2025 current estimate 

• Fees from ONG and PSO are below projections due to a mild fall and winter, which lowered energy use and tax revenue 

• Revenue from cable television fees continues to fall as more customers drop this service, also known as “cord-cutting” 

INTEREST INCOME REVENUE 

• This revenue stream is the most difficult to project due to the volatility of interest rates 

• The total forecasted for fiscal year 2026 is $31.9 million, down 24.8% from the fiscal year 2025 current estimate 

• The estimate is based on the Federal Open Market Committee’s projection of two to three interest rate cuts in 2025 

HOTEL/MOTEL TAX 

• This revenue stream comes from a 5 percent lodging tax on the occupancy of hotel and motel rooms within the city 

• Forecasted to increase by 0.5% to $9.9 million, based on insights from Visit Tulsa, which monitors local tourism trends 

Historically, the Budget Division has a strong forecasting track record with estimates within 2.5% of actual revenues, with only one recent year (2020) falling below estimates.  

DEEP DIVE: 

• View the forecasting discussion here 

• View the forecasting presentation here 

• View the executive summary of the budget here 

Follow along with the budget process and learn more at tulsacouncil.org/budget.