The Edmond Sun

Opinion

July 29, 2013

The state didn’t steal the pot of gold

EDMOND — Last week I wrote about my desire to help local school boards save money for infrastructure needs while avoiding debt and property tax increases. House District 31’s rapid growth and corresponding increase in property tax collections continue to provide area school districts with new resources. Districts should be allowed to set aside some of these funds to build and improve school buildings without incurring debt or having to ask for a tax increase.

I agreed that state law is not currently conducive to this pay-as-you-go approach but I want to change the law. I previously passed legislation allowing rural road districts to employ this approach and am interested in doing the same on behalf of school districts. This would allow districts to set aside new growth revenues without incurring a penalty in the state aid formula and lift limitations on the districts’ ability to spend for building and construction needs. I believe there are fiscally conservative local school board members who would want to use this as a powerful tool for meeting infrastructure needs without tax increases and debt.

Considering the proposal would give innovative options to school board members, you can imagine my surprise when a Guthrie school official published a reply that made it appear to the casual reader as though the district receives no financial benefit from new property tax revenues.

While he admitted to the existence of new growth money, he stated, “We will receive this money from your property taxes, but additional funding we receive from the state is reduced by the same amount.”

This suggests the new growth money is completely used up in a one-for-one penalty against the district’s funding from the state. In this statement, the impact of increased funding is hidden from the very taxpayers who are paying the new taxes as the writer indicts state government for taking away the district’s newfound revenues.

I spoke with education and tax staffers for the House of Representatives who write and work with the funding laws. They confirmed what I already knew.

There is no one-for-one penalty!

State law requires districts to charge 18 mills of property tax income against their state aid. Districts commonly bill the property taxpayers in the area of 44 mills not counting bond issuances. Twenty-six of these mills are not charged against state aid. Even when deducting the district’s properties valuation from salary incentive aid, a district keeps around 60 percent of new property tax collections without a corresponding charge against state funding. Let me make this very clear: For every $1 of new property tax revenue, the district keeps about 60 cents, penalty free.

As property tax revenue has risen, Guthrie’s state aid funding has not declined but increased. During the last year, the district’s growth in state funding far surpassed even the increase in property tax funding. This year, the district will receive $750,579 more in state aid compared to this time last year.

Five hundred and nineteen public school and 19 charter school entities will receive state funding this year. Of those entities, Guthrie ranks No. 22 in the amount of year-over-year increase.

Consider this bizarre fact: The Guthrie district’s increase in state aid surpasses the increase received by the Edmond district.

Part of this growth may be attributed to the $91 million of additional common education funding provided this year by the Legislature. Roughly half the money appropriated by the Legislature goes to education entities.

Of course, the growth in the number of students that leverages this increased funding also requires increased expenditure.

But I firmly believe that as state law is modernized, the districts could use part of this new funding to budget for infrastructure needs.

School officials must be transparent about important financial facts like these.

They are set to benefit greatly from the new appropriations and property tax growth money. They must know that with taxpayer funding comes the obligation to be transparent so a verdict may be fairly rendered upon their stewardship.

REP. JASON MURPHEY, R-Guthrie, represents House District 31, which encompasses all of Logan County and a portion of northern Edmond. He may be reached via email at jason.murphey@okhouse.gov.

 

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Poll

Do you agree with a state budget proposal that takes some funds away from road and bridge projects to ramp up education funding by $29.85 million per year until schools are receiving $600 million more a year than they are now? In years in which 1 percent revenue growth does not occur in the general fund, the transfer would not take place.

Agree
Disagree
Undecided
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