Synopsis of HB 2244 Impact on School Districts
Motor vehicle license fees are a major source of revenue for the state, counties and school districts in Oklahoma. The Oklahoma Tax Commission by statute in Title 47 is charged with the responsibility of collecting the revenue and apportioning it among the recipients including the share that is divided among school districts. The school district share before 2000 was apportioned based on first giving each district the same amount it received in the same month the preceding year or a proportionate amount thereof if that month’s collections were insufficient. In 2000 the apportionment changed to assure sufficient funds available for full distribution of each month’s amount from the preceding year by reducing the state’s share and thus making unnecessary the prior provision for proportionate apportionments.
The school district share is a major revenue source that is considered part of the dedicated, local and state aid revenues that make up the foundation aid distributed equitably among school districts pursuant to statutes in Title 70. The amount each school district is “charged” with, or expected to collect, each year for the foundation aid to be equitable is based on the preceding year’s total collections. If school districts statewide collected approximately the same amount of motor vehicle revenues as they did the year before then the equitable, or balancing, purpose of state aid under Title 70 with respect to motor vehicle revenues is fulfilled; if instead the amounts school districts receive vary wildly from the preceding year’s collections the purpose of state aid is frustrated.
The 2015 legislature hastily amended Title 47 ostensibly to “cap” the amount of total revenue going to counties and school districts to allow the state to capture future growth revenue for its share. The amendment left untouched the school district apportionment language but to fully enable the “cap” removed the authority for the Commission to reduce the state’s share in order to fully fund the school districts’ preceding year’s monthly amounts. When confronted with the first “under collection” month the Commission construed the statute to say, which it does not, that if there were insufficient funds to fully apportion every school district the same amount as the same month the preceding year, then no funds could be distributed in furtherance of that priority under the statute. Instead it concluded that all funds must be distributed by the method of last resort, ignoring that such method was only to be triggered after the first two priorities were satisfied, i.e. full distribution according to the amount the year before and filling in any shortage in that amount for earlier months of under collection.
As a result motor vehicle revenues have been incorrectly distributed based on average daily attendance for ten of the thirteen months since August 2015 instead of based on the preceding year’s collections. This has caused school district receipts of this important revenue source to vary wildly from the amounts estimated and made a part of the calculations for each district’s state aid. This in turn has greatly frustrated the equitable purposes of state aid in Title 70.
In effect the legislators who voted for HB 2244 in 2015 (http://www.oklegislature.gov/BillInfo.aspx?Bill=HB2244&Session=1500), through their failure to correct the Commission’s silly application of the amended law, have moved the amounts listed from the “losers” fund balances to the “winners” fund balances during fiscal 2016, a total of over $14 million shifted through no fault of any school district and for no good reason. Another $7 million is at risk of being shifted the same way in FY 2017 or after if not corrected.
Here is a list of all 419 school districts impacted:
Here is the same list sorted from greatest “losers” to greatest “winners” by dollar amount:
Here is the list sorted by ratio of 2016 collections to 2015 collections, low to high:
There is litigation in Oklahoma County District Court to correct this travesty imposing more unnecessary expense and confusion on school districts due to the actions of the legislators who voted for HB 2244. Here are the documents filed to date in that litigation.