As everyone knows by now, Oklahoma Public Schools receive ad valorem revenue (property tax) as a primary source of operational funding. This operational funding is used for teacher salaries, building upkeep, technology acquisition, school bond issues, and just about everything else that public schools spend money for, including teacher pay raises. Almost $1 Billion ($950,087,394) in school ad valorem revenue already existed in 2015 for teacher pay raises and all operational expenses for our public schools. This ad valorem revenue could be provided to schools by our state legislature without raising taxes for anyone! In California, over $4 billion was provided to teacher and student revenue without raising taxes, by utilizing this funding mechanism.
About a year ago, when the one-cent sales tax increase for teacher pay raises was being considered by Oklahoma voters, many city officials (managers and councilpersons) came out against it. They were concerned that schools would be accessing a revenue stream that traditionally supports city government, and made statements such as "Schools should just go after ad valorem taxes unless they want cities to access ad valorem revenue". As a matter of fact some cities do receive ad valorem revenue which satisfies various one time and continuing financial obligations of the cities called the Municipal Sinking Fund. In 2015, the incorporated communities within Oklahoma and Tulsa Counties have mill levies on ad valorem totaling $505,873,947.38 for their MSF. This revenue, if acquired by our public schools, could provide a $12,971.13 pay raise for Oklahoma teachers. The Oklahoma Legislature would have to eliminate the law which requires municipalities to maintain sinking funds, which in turn schools could use for teacher pay raises. This is a very unlikely scenario, however, as most city officials would simply not give up this ad valorem revenue for teacher pay raises, and they carry much influence with our local state lawmakers.
In addition to to the sinking fund (ad valorem) revenue cities control, they also offer subsidies for private economic development by dedicating future property tax revenues of a particular business or group of businesses toward an economic development project. These property tax subsidies are called Tax Increment Financing, better known as TIF. In 2015, approximately 40 Oklahoma municipalities with 69 TIF zones, controlled $445 Million in ad valorem revenue. This property tax revenue would be enough to provide every Oklahoma teacher a $11,410 raise. So, the bottom line is this: The Oklahoma State Legislature could provide over $950,000,000 in ad valorem revenue (currently controlled by municipalities) to our public schools for teacher pay raises and operational funding if all Oklahoma TIF zones were eliminated. For Blanchard Public Schools it could mean an additional $2,925,720 in ad valorem revenue for employee salaries! The Oklahoma public schools which should be extremely angry are not those whose municipalities have TIF zones (currently about 40), but those whose municipalities do not (about 487). The same amount of ad valorem revenue is shorted for all schools, regardless of whether or not a TIF zone is located in a school district. Again though, it is unlikely the Oklahoma Legislature would approve of this plan as public schools and teachers have very little influence with our elected state officials. In California, however...
TIF's began as a way to finance re-development of cities in California in 1952. TIF's were outlawed in 2010 by its state legislature and Governor Arnold Schwarzenegger because public schools and other taxing entities were being choked to death by property tax revenue being diverted to cities. What happened as a result of TIF elimination in California was teacher pay raises and county improvements, as a result of the influx of money they should have already had. Everything you would like to know about California TIF's can be accessed on planningreport.com.
The Oklahoma Association of School Administrators (OASA) has advocated for cities to allow those who are detrimentally affected by TIF's (schools, counties, and libraries) to have a say in a TIF district's implementation. A simple majority vote could determine the TIF's existence. The OASA is not advocating for the total elimination of TIF zones, as in California, but to simply allow those whose tax dollars (ad valorem) are being re-directed to municipalities, to have more influence. A giant pay raise for teachers would be realized - without raising taxes on anyone!
No comments:
Post a Comment