Methodology

The City’s projected revenue for each year of Norman Forward is a matter of public record. The latest information that I have found is here - http://www.normanok.gov/sites/default/files/Features/July%2014%20CC%20Conf%20-%20Norman%20Forward.pdf - and these were the projections used in the Norman Forward election campaign. Calendar year 2016 was the first year for NFST collection and the projected revenue was $10,279,463.

I have calculated monthly ‘benchmarks’ so we can see how much progress we are making toward our revenue goals. I used two different ways of calculating the benchmarks.

The first method involves calculating the average daily NFST we would need in order to reach the goal ($10,279,463/366 days = $28,086/day) and assigning to each month a benchmark based on the number of days per month (e.g., 31 day months need to create an income of $870,665 [= $28,086/day * 31 days]). This, of course, is a pretty simplistic, linear model of revenue projection.

The second method is meant to address the simplistic assumptions of the first. Different months are better for sales tax collection than others. In order to get a handle on that, I used historical data on monthly taxable sales in Norman from 1980 to 2012 (from origins.ou.edu) to calculate an average percentage of yearly taxable sales per month. The results were about what you would expect - December accounts for 9.54% of yearly taxable sales; January for only 7.58% - with a few mild surprises - February accounts for more taxable sales (8.12%) than either March (7.99%) or October (7.86%). I used these averages to calculate the benchmarks for each month: January NFST collections should account for 7.58% of the yearly target; February NFST collections should account for 8.12% of the yearly target; etc.

The spreadsheet where all of this is worked out is here: https://docs.google.com/spreadsheets/d/1WGVk7LiaQbPyImSnmBmb8gcUMqPliP3DT_J1e1ArWDI.