State Question 800 and 801

   Two state questions which may profoundly affect schools and potentially increase taxes for Oklahomans are State Question 800 and State Question 801. Voters will decide these questions on November 6, 2018. Both questions sound really benign and are touted as the answers for funding public schools and balancing the state budget, but are really not designed to do either.
   The Oklahoma State School Boards Association (OSSBA) states that  "State Question 800 is a proposed state Constitutional amendment to create a new state budget reserve fund to collect an increasing percentage of collections from the gross production tax (GPT) on oil and gas. This off-the-top set-aside to the new Oklahoma Vision Fund would begin on July 1, 2020..." Eventually, 100% of  GPT collections will be deposited in the fund and after July 1,2020, 4 percent of the fund's principal will be deposited each year into the state's General Revenue Fund. The OSSBA reports that schools now receive about 10% of all gross production revenue in dedicated funding outside of the appropriations process. "The annual diversion of GPT collections would erode the level of dedicated funding and take millions of dollars in potential funding for schools off the table every year... and will eventually eliminate GPT as a dedicated revenue source for schools."
   One scenario which may occur if SQ 800 is approved: If GPT is eliminated as a dedicated revenue source for schools, the legislature will have no choice but to provide more appropriated revenue to schools.. in order to make up the loss. In order to provide more appropriated revenue to schools - taxes on working Oklahomans will likely increase. This is not good. Another scenario is that the once dedicated GPT may be sent to schools through the appropriations process, where all public schools will receive an equitable appropriation, but will still be much less than their original dedicated amount. This scenario is not good either, but is more likely, since charter schools are clamoring for more tax dollars. The legislature is likely to increase taxes in either scenario. If one considers himself/herself a "low tax" conservative, they should vote "NO" on SQ 800.
   State Question 801 will allow public schools to utilize Building Fund monies for operational expenses, like teacher salaries. Currently, schools receive local ad valorem (property tax) monies to maintain school buildings. The funding cannot be used for teacher salaries, etc... Those lawmakers supporting SQ 801 believe that schools should have the flexibility to use building funds for operational expenses. The only problem with this scenario is that schools receive unequal amounts of building fund monies, because it is based on the property value in each district. For instance, one school with 1,000 students and 35 teachers may receive $50,000 per year in building funds, but another school with the same number of students and teachers may receive $1 million. The first school spends its entire $50,000 for building maintenance and upkeep, while the second school spends $50,000 on building maintenance, but has $950,000 to pay its 35 teachers more money - which results in a  $27,000 raise for teachers. The previous example is exaggerated to provide the context of unequal treatment, but still exists.
   Many conservatives believe that the approval of SQ 801 will eventually lead to higher property taxes for home and land owners and here's how: If SQ 801 is approved by voters in November, the next thing lawmakers will likely do is to try to equalize building fund monies for schools statewide. Our state lawmakers cannot re-distribute local property taxes for schools without controlling all local property tax statewide. Stay with me now... If the representatives and senators can acquire control over local ad valorem revenue, under the guise of equalizing now operational dollars, they may effectively increase this taxation, in order to provide for the schools which do not receive as much as others. Many conservatives will vote "No" on SQ 801, for this reason alone - it is a veiled attempt to increase your taxes...
Update: October 17, 2018 - The Daily Oklahoman claims support for State Question 801 in Measure would provide school districts flexibility in the Tuesday edition of the editorial page. The opinion of the editorial team is that property rich school districts should be allowed to use "Building Fund" money for operational expenses, including teacher salaries, because it will lead to better school management.
   Presently, schools receive 5 mils of property tax for school building maintenance and repairs. Many schools save their  building revenue for other purposes, such as a new roof or other small building improvements. As noted previously, not all schools are equal in receiving building revenue and many schools already use excess building revenue for custodial and maintenance employee salaries. Spending Building Fund revenue for custodial and maintenance salaries helps take the pressure off a school's General Fund, with which teacher salaries are paid - so many schools already use building funds for allowable salaries.
   We predict two things will happen as a result of SQ 801 passage. First, look for legislation which will equalize Building Fund revenue statewide - so all public schools will be equalized in the acquisition of operational dollars. The only way lawmakers can provide equity for building fund revenue is to control local property taxation, and then re-distribute to all schools based on the number of students. This scenario will be good for some schools (especially the virtual charter schools which now receive no building fund revenue) and bad for others (the small schools which now receive no state funding). The state will now be responsible for funding those schools which presently are only locally funded, so lawmakers are likely to increase state taxes in order to properly fund them.
   The second thing that will likely happen is that schools may be allowed to vote additional property tax millage (from 5 mils to 10 mils for Building Fund revenue), and property taxes will increase, thereby absolving the legislative responsibility for appropriately funding our public schools.