Opinion: Rick Braught, Duncan Community Leader
February 13, 2025
Decide for yourself if you believe the City of Duncan best serves your interests in overseeing, managing, and owning the economic development function for the community or if Duncan Area Economic Development Foundation (DAEDF) has shown and proven their management of community investment and stewardship of funds designated for economic development has been successful. DAEDF has a proven track record of creating and retaining value for the City of Duncan, surrounding communities, and Stephens County. As you read this, ask yourself: why is the City of Duncan REALLY spending your tax dollars through lawsuits to fight DAEDF in an attempt to obtain possession of properties and funds owned and designated for DAEDF?
In 1994, the first one-half cent sales tax for the direct support of economic development was approved, with the full tax amount designated for use by DAEDF. The tax continued as originally approved into 2015. In 2015, while the tax was again approved by voters and remained one half cent, proceeds were directed to be split with one-half designated for use by DAEDF and the other half to be retained by the City of Duncan in support of specified City operations. Note: in 2024, a similar tax was again approved by voters but the City of Duncan retains 100% of tax proceeds and it is no longer split with DAEDF.
From 1994 through 2022, $37.67 million in tax revenue was collected. During that 28-year time period, cumulative disbursements to DAEDF, which were all approved by the City of Duncan, totaled $35.52 million. Those funds were utilized for traditional economic development incentive agreements to cover operational expenses and to expand local hiring and business activity. Such activities focused on the purchase of properties and construction of buildings to be leased to new and existing business who would bring additional jobs to the area.
Total purchase or construction costs for DAEDF owned buildings was $27.3 million, or 76.9% of disbursements. Of this total, only $15.2 million (55.7%) of the costs were funded through the dedicated sales tax while the remaining $12.1 million was funded through internal income generated through DAEDF's leasing operations. The net cost to the public of this type of economic development strategy is far lower than simply providing cash incentives and the resources remain in the community should a business who is receiving incentives choose to relocate outside the region. Market-based appraisals were not done for this study but the total market value was expected to be substantially higher than the acquisition costs of the land and buildings, and much greater than the value of funds collected and spent through the designated sales tax, plus there was also no outstanding debt on any of the properties.
Firms receiving incentives also pay significant ad valorem taxes on both real and personal property. In 2022, seventeen firms were identified as paying a combined $3.41 million in ad valorem taxes. Note that not all tax payments by firms receiving incentives can be identified. Several firms receiving incentives also pay significant ongoing utility revenue to the Duncan Public Utilities Authority, which contributes to City funding.
Total compensation paid by all employers who received incentives averaged $233.3 million annually between 1996 and 2022. Funds approved by the City of Duncan and expended by DAEDF, in partnership with funds collected by DAEDF through lease payments, supported seventeen construction projects totaling $71.6 million that were completed in the area from 1994 to 2022. For comparison, actual construction expenditures across this period adjusted for inflation were equal to $119.8 million in 2022 dollars.
In 2022, all firms receiving incentives directly employed an estimated 2,953 workers and paid $241.7 million in employee compensation. Direct employment in 2022 supported an estimated 4.734 additional jobs in a 7-county region through spillover effects.
This study was completed in February 2023 by RegionTrack and Dr. Mark Sneed, an economist who primarily focuses on regional economic modeling and forecasting, local area economic development, and the economic role of the nation’s energy-producing regions. Dr. Sneed also served as vice president and Denver branch executive of the Federal Reserve Bank of Kansas City where he served as the Reserve Bank’s regional economist, and he was the founding director of OSU’s Center for Applied Economic Research and a research economist on the Oklahoma State Econometric Model. Full report available CLICK HERE.
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