Muskogee council seeks loan to shield taxpayers from tax hikes

Muskogee city leaders began formal talks on November 4 to secure a loan that would pay off nearly $30 million in court awards. The move aims to prevent property tax hikes for residents who have expressed concern over the city's growing debt.

At a special City Council meeting, members authorized City Manager Kendal Francis, his staff, and the city attorney to negotiate with the City of Muskogee Foundation. The council has not yet approved a specific loan amount or terms. The initial step is to open discussions on whether the foundation will lend the funds.

The city currently faces three legal judgments totaling $29.25 million. These awards relate to properties that the city previously condemned and demolished. Interest accrues on the debt at a rate of approximately $7,000 per day, according to Mayor Ryan Lowe.

Lowe stated that the primary objective is to keep the financial burden off taxpayers. He noted that a loan provides an alternative to immediate tax increases while the city works to settle the judgments.

The financial pressure has already influenced other local decisions. Muskogee Public Schools paused its timeline for a potential bond election due to worries about how the legal judgments might affect property tax rates.

The City of Muskogee Foundation previously declined a direct request to pay the judgments. However, the organization did approve a separate $10 million grant for operating expenses. This grant provides $2 million annually over a five-year period.

Resident Bill Day said the prospect of higher taxes is making him consider moving to Broken Arrow. Day said he would keep his house on the market if taxes rose to match levels in neighboring cities. He added that avoiding a tax increase would allow him to stay in Muskogee.