Thunder Up The Taxes!

Abstract

Oklahoma City taxpayers approved a 1% sales tax to raise an estimated $120
million for improvements to lure the Seattle Supersonics, now the Oklahoma City
Thunder. City civic leaders engaged a “Big League City” campaign, touting economic
growth, increased business activity and jobs, and better quality of life as reasons to
support the initiative. We evaluate the “Big League City” economic claims using
local sales tax revenues to estimate the level and growth impacts resulting from the
relocation of the now Oklahoma City Thunder. We find no significant relationship
between the operation of the franchise and contemporaneous sales tax collections.
However, we find a modest positive significant relationship between the presence of
the franchise and the year-over-year growth rate of aggregate sales tax collections,
providing some support for the amenity “Big League City” argument.