Reports recently obtained by OU Daily found that despite the city of Norman generating more sales tax revenue from OU football and back-to-school season, revenue from May graduation weekend has decreased since moving to the Southeastern Conference in July 2024.
Now, city financial and economic leaders are weighing in on what they describe as a “fascinating” trend that could ultimately force the city to “tighten our belt” if the decline continues.
‘Kind of stalled’
In an interview with the Daily, Clint Mercer, city of Norman finance director, said though the city is not too concerned with the trending decline in revenue from May 2023 to May 2025, the decline follows revenue trends since the COVID-19 pandemic.
“Overall, sales tax has been pretty flat during those years; It's not been booming. We were coming off some years there post-COVID, where we had tremendous gains,” Mercer said. “The fact that it's leveled off is not surprising, especially given the general economy as a whole.”
Mercer added that though the move to the SEC has benefited Norman’s economy, the overall effect has been mixed.
“We do see (the) increase the SEC is having, but it's got to be considered with the overall economy, which has kind of stalled a little,” Mercer said. “You have to combine them.”
Mercer also noted tariffs and inflation as economic aspects that could have tempered the SEC’s impact on the Norman economy.
Mercer said the city tracks monthly highs and lows in sales tax revenue for next steps and as of now, the city is above last year’s numbers.
“We are about 1.59% above our year-to-date number compared to last fiscal year. That just shows it's growing slowly,” Mercer said. “We monitor that monthly. If we see a sharp decline, then that's when we need to start making adjustments to our expenses to rein them in and make sure we finish within budget.”
Mercer warns that if revenue continues to decline, the city could be forced to make changes.
“If it continues to trend downward, we (will) have to tighten our belt and take steps to curve back because we're not going to get the sales taxes that we budgeted,” Mercer said. “We have to take care of the revenues that aren't going to come in.”
Mercer previously told the Daily that May sales tax tends to be “middle of the pack” and noted OU’s sole SEC-era graduation as down 4.76% from the year prior. OU’s second SEC-era spring graduation will occur in May. Sales tax receipts for May will be available in July.
‘An interesting phenomenon’
Scott Martin, president and CEO of the Norman Chamber of Commerce, said OU’s consistent enrollment growth would suggest increased revenue.
“That is fascinating,” Martin said. “Enrollment trends would lead you to believe that there'd be more students graduating each year. We’re still experiencing double-digit enrollment (growth).”
Martin said he does not believe the decrease is linked to OU’s SEC or Big 12 memberships.
“I don't know that the two are interrelated as far as (athletic) conference. Who knows what the change may be, or why the discrepancy (is) from one to the other?” Martin said. “It's fascinating, because with enrollment going up, we're having a lot more students here spending money.”
As enrollment increases, Martin suggested hotel room availability not keeping up with tourist demand could explain why May sales tax has decreased.
“We're capped out as far as hotel rooms go in Norman, at least for the time being. We know that there's going to be additional hotels built in the future, but for right now, I don't think there's been much change in the last handful of years,” Martin said. “Maybe just one or two smaller hotels have come online in the last five years. … The actual number of people that can stay in Norman from out of town on any given weekend or night is capped … and hasn't changed.”
Martin said on top of limited hotel rooms, decreased student engagement during graduation could be a factor in the decrease.
“Maybe students aren't going to participate in graduation ceremonies like they used to, so they're not having families come to the same degree that we once used to experience,” Martin suggested.
Martin said while sales tax revenue has decreased, guest and motel tax revenue has likely increased.
“It's an interesting phenomenon. Clearly, we're having more students coming (to OU) and graduation numbers are going up. So those numbers are trending in the right way,” Martin said. “I suspect, if you look at guest tax (and) motel tax, that it's probably gone up in the last five years. … I would venture to suggest that that particular tax has gone up.”
Dan Schemm, president and CEO of Visit Norman, said in an interview with the Daily he believes the decrease lies with Norman residents having to be more money-conscious, not visitors coming to Norman.
“Visitors are coming (and) they're spending money. I think our residents (are) where the drop is happening,” Schemm said. “With the economy, they're having to save more for necessities, whether that's housing, food, maybe retail and arts and entertainment, recreation, that type of thing.”
Schemm reiterated Martin’s assertion that Norman does not have enough hotel rooms for all of the out-of-town visitors on major tourist weekends in Norman, such as football, graduation and parents weekends.
“We certainly do not have enough hotel rooms, but you have to look at the entirety of the calendar. Those hotels have to be profitable for weekends other than those as well,” Schemm said. “Just like you don't build a church necessarily for Easter Sunday, there's only so many hotel rooms we can have to be profitable.”
Schemm said while the city easily fills hotels for major tourist weekends, building more hotels could hurt the local hotel market.
“I think there's some room in the market for an increase. If you're just looking at graduation weekends and football weekends, we could double or triple fill those hotel rooms, but we wouldn't have a healthy ecosystem for our hotels if we had that many,” Schemm said. “We can handle an increase, but not enough to match the capacity needed for those weekends.”
On April 7, Norman voters approved five propositions, including one that increased the city’s guest tax rate from 8% to 10% for all visiting non-residents. The revenue generated from the increase will support Norman parks, trails and tourism festivals.
Funds from the guest tax increase will also go toward constructing a recreational vehicle park in southeast Norman, which Schemm says could help boost May tax revenue.
“Once that RV park comes online, (the city will) certainly see an impact,” Schemm said. “We know that other SEC communities have much larger private RV parks that have been very successful. That's part of the culture in the SEC, so that would certainly help … market to our visitors and (try) to bring those into town, but also to our arts and parks.”
Schemm said the city has seen steady growth in guest tax revenue since joining the SEC, pointing toward increased quality of life and tourism in Norman.
“We have seen a big increase in guest tax collection since we entered the SEC. For fiscal year 2025 — that's July of 2024 through June of 2023 — we saw an almost 15% increase year over year for fiscal year 2026, year to date, …” Schemm said. “Year to date, we're up another 11.39%, so we've continued to see an increase there.”
However, Schemm said he would not expect a big increase in graduation-related revenue at this time since OU’s largest classes are only now starting to graduate.
“It's still the enrollment back from pre-SEC days, and so you have a relatively stable number of graduates with parents coming in, …” Schemm said. “I don't know that I would expect a year-over-year increase necessarily for graduation.”
Schemm stressed the importance of not only accommodating visitors to Norman, but also encouraging spending at small, local restaurants and businesses.
“If we didn't have our visitors spending, we would have fewer dining options, fewer entertainment options,” Schemm said. “Those dollars coming in are vital to the economy, and we'll keep working to attract them and bring them in.”
The Daily reached out to Lawrence McKinney, president and CEO of the Cleveland County Economic Development Coalition, for comment three times over email and twice over phone, but did not receive a response by the time of publication.
This story was edited by Natalie Armour. Gretchen Schultz copy edited this story.
