Ad valorem tax Q & A

Several questions have arisen on the issue of the miscalculated ad valorem tax from 1992 to 2014. This is a series of Questions and Answers from the Oklahoma Schools for Fair Funding .

Q: How did this funding miscalculation happen? Who’s at fault?

A: We’re not sure how it happened and we’re not here to blame anyone. We’re simply asking the Supreme Court to resolve the issue and for the Oklahoma State Department of Education and Oklahoma Tax Commission to determine how it’s done.

Q: Assuming the “advantaged” schools have already spent the money, where do you propose the reimbursement come from?

A: It’s not for us to say. We’re not seeking to punish or penalize schools that have benefited from the mistake. We’re simply asking that schools that have been disadvantaged by this mistake are “made whole.” This is an issue of fairness. Where the money comes from is not up to us. The law is pretty clear however, and the Supreme Court has spoken on similar issues in recent years. Any school district that gets more money than it ought to, even at no fault of their own, is legally bound to return it.

Q: Why take the issue to the Supreme Court and not the Oklahoma Legislature?

A: This is a legal issue and not a legislative issue. The Oklahoma Legislature did not err and there is nothing legally they could do to correct the mistake. The Oklahoma Supreme Court is the only court in our view that can address this issue by requiring State officials to perform their statutory duties.

Q: Have you met with Superintendent Hofmeister? What is her position?

A: Yes, we have met with her. She understands and is knowledgeable about the issue. We believe she wants what’s fair to all schools. It’s worth pointing out that Superintendent Barresi corrected the mistake a few months before she left office and Superintendent Hofmeister likewise has supported this adjustment since she took office. However, that doesn’t correct the 22-years when the funds were misallocated.

Q: In total over 22 years, how much money has been misallocated?

A: We don’t have a total amount for all of the districts, but we can give you some examples. In Ponca City Public Schools, for instance, we estimate a loss of $13 million over the 22 years. Oklahoma City Public Schools estimates their loss to be $40 million and Enid Public School’s estimate is $4.5 million.

Q: What is the timeframe for resolving the issue? What’s next?

A: It’s up to the Oklahoma Supreme Court. They will consider the case in the time they deem appropriate.

Q: How could this money have been used?

A: The bottom line is that the children in these school districts were deprived of a better educational experience. The funding could have been used to reduce class sizes and to provide more individualized instruction, college placement guidance, technology assistance and other services to prepare children for life.

Q: How does this make you feel?

A: It makes us sad for the children because they did not receive the educational experience the taxpayers intended. We are sad for the taxpayers who paid extra taxes to make their children’s educational experience better and have found that money was diverted to other school districts. We are duty-bound to get this resolved.

Q: How does this play into the school funding crisis that the state is currently facing?

A: The present school funding crisis is an entirely separate matter. The budget process of the State Legislature is a separate issue. The Legislature is not to blame for the issue we’re talking about today.

Q: You are asking the Oklahoma Supreme Court for relief. What help are you looking for?

A: It is really quite simple. We’re asking the Oklahoma Supreme Court to tell state officials they should do their duty, follow the law and return the dollars that should have remained in the local school districts to begin with.

Q; It sounds like some school districts could get quite a windfall from this, right?

A: Not at all. Taxpayers who willingly paid extra taxes to benefit children in local school districts have treated unfairly. Children who should have had their educational experience improved by local taxpayer funding were denied those benefits. Asking that those taxpayers and children receive the funds they should have received is no windfall. That is recovering taxpayer money that never should have left the school districts. It is righting a wrong.

Q: So if the law wasn’t followed for 22 years, why has it taken so long to figure this out? How was it discovered?

A: We have asked the same question. In 1992 the Oklahoma Legislature changed the law for commercial and agricultural personal property (“CAPP”). The change in statute wasn’t reflected in state allocations for schools, and so the tax dollars that were supposed to stay in school districts within certain counties instead went into state coffers and was distributed to other school districts statewide. A local school district superintendent discovered the problem when the state allocation for that school district didn’t match up with what he thought it should be.

Q: Are taxpayers in these school districts upset about this?

A: Absolutely. If you are paying higher taxes in relation to other counties to benefit the children in your school district and those dollars are going to other districts that are not paying higher taxes, of course you are going to be upset. That is fundamentally unfair to the taxpayers and children in the school district.