All The State’s Money

In my post A Letter to Stitt, I tried to explain why any effort to allow more local millage in support of Oklahoma’s schools runs counter to Governor Stitt’s duty to provide a free public education for all of Oklahoma’s children UNLESS he is willing to pony up a new state dollar for every new local property tax dollar raised.  If all affected districts opted in, each additional mill would cost about $30 million or so in new state money.  In this post I show him where some of that state money can be found without raising taxes. 

The SDE spreadsheet that I am enamored with shows us that 77 districts (column AN) are off the Foundation Aid formula including all but one of the 39 that are also off the Incentive Aid formula (column AO), meaning a total of 78 are receiving more from the seven revenue sources included in the calculation of state aid than is needed to meet the legislative target of $3,592.37 (1,837.57 + 20 x 87.74) per weighted student.  Since all of those 78 districts are receiving revenue from some or all of the five state dedicated revenues, County 4-Mill through REA Tax below, then undoubtedly some of that revenue could be diverted to help match new local millage.

Here’s a table that shows the sources and totals of funds flowing through and around the state aid formula as shown in the SDE’s spreadsheet:

Local Property Taxes	1,260,524,569
County 4-Mill	111,258,350
School Land	100,031,979
Gross Production	103,560,732
Motor Vehicle	250,188,448
REA Tax	44,107,211
State Aid	2,368,584,982
Total Revenues	4,238,256,271

Local Property Taxes are the 35 mills I described in my previous post flowing to school districts as provided in the Oklahoma Constitution.  The next five are referred to as the State Dedicated Revenues. Two of the five, the County 4-mill levy and State Land, are also embedded in our state constitution at Article 10, Section 9 and Article 11, respectively, while the others, i.e. gross production, motor vehicle and rural electric apportionments to schools are set forth in statutes.  Interestingly Title 70, Section 18-109.7 provides that those three revenue sources shall be paid into the Common School Fund when voters amend Article 10, Section 12a of the state constitution, which apparently never happened.  If those three revenue sources were allocated as part of state aid instead of directly to school districts we can get an idea of what happens by simply replacing the data in columns K, L and M with zeros for all districts and letting the SDE spreadsheet (that I love) recalculate the amounts of state aid now required. 

What pops out, as expected, leaves the Transportation and Salary Incentive aid calculations (Columns R and W) unchanged.  That’s because those calculations are independent of the state dedicated revenues.  But the net Foundation Aid total changes to $1,347,958,545 (Column O) from the original $1,004,095,242—an increase of $343,863,303.  Not to worry though because $397,856,391 has been added to funding for net state aid from the three dedicated sources leaving a dividend of $54 million that is available to match the increase in local millage Stitt wants to allow and still keep school districts with reasonably equalized operational funding.  The $54 million comes from the 77 school districts that were off the Foundation Aid formula before we made the change; that count is now 35 meaning 42 have been brought back into the Foundation side of the equalization formula.

Since additional local millage will require amending our state constitution any way, we can consider what happens if the other two, County 4-Mill and School Land (Columns I and J), are also be placed in the Common School Fund (I think it exists, if not the annual state aid appropriation) and apportioned through the formula.  The resulting amount needed for net Foundation Aid (Column O) increases by $204,990,568 to $1,552,949,113, but we have $211,290,329 to offset that, leaving Stitt with $6.3 million more to match additional local millage (maybe not worth the constitutional change).  Our beginning chart would now look like this:

Local Property Taxes	1,260,524,569
County 4-Mill	0
School Land	0
Gross Production	0
Motor Vehicle	0
REA Tax	0
State Aid	2,917,438,853
Total Revenues	4,177,963,422

Which is right at $60 million less than the Total Revenues above—about enough to match two new local mills.  Also another 11 school districts are brought back on the Foundation Aid part of the formula. Next time I’ll help our Governor “blow it up”.

As always lunch is on me for the first to ID the photo location.