I’ve previously posted about the motor vehicle collections litigation this Thinker has been involved in for over three years now so if you want to share my obsession you can enjoy background information here: HB 2244, Turkish de Fright, Twas Night Before Sine Die, and Motor Vehicle Litigation Update. Here are links to the four cases the matter has spun off:
Four underpaid districts seek original jurisdiction with the Oklahoma Supreme Court; they decline but what we predicted comes to pass. April, 2016.
Eight underpaid districts seek injunctive and declaratory relief in Oklahoma County District Court, June 2016 with decisions in their favor in December, 2016 and November, 2018.
The Tax Commission appeals the December 2016 order, but the Court of Civil Appeals sides with the underpaid districts and expands the order, February, 2018.
Ten overpaid districts ask the Oklahoma Supreme Court to stop the November, 2018 order of the district court; they decline and order that the correcting payments continue.
The eight hundred pound gorilla throughout this litigation has been the belief by most of the school finance community, meaning many finance professionals with school districts, and possibly with the State Department of Education and the school boards and administrators associations, that the state aid formula has already made the underpaid school districts whole. This demonstrably silly belief surfaced in the unsuccessful effort by the ten overpaid districts and fortunately failed with the Supreme Court.
There is still work to be done to restore the more than $22 million wrongfully overpaid to 146 districts at the expense of 271 that were underpaid. For that to happen the silly belief that the formula corrects all harm done has to be replaced with a correct understanding of what the formula does and does not accomplish. In preparation for a public education effort by this Thinker I am posting a series of alternative demonstrations showing how the formula works. First is a reprise of the parable included with my last Motor Vehicle Litigation Update:
Somewhere East of Tulsa
First Year
Adam’s two sons, Cal and Aron, are about to enter university in faraway towns, Norman and Tulsa, respectively. Adam has carefully calculated their yearly expenses, tuition, books, room and board, to be $1000 each. His brother Ishmael, a very successful goatherd without children of his own, has offered to provide the income from selling the milk of twelve goats, six to winter in Norman and six in Tulsa, estimated at $100 per goat, toward the expenses of Cal and Aron. He also provides servant goatherds, Jolley and Tony, in each town to feed and milk the goats. Adam does the math and sends his sons off to university with $400 each.
After their first year they return home to work in their father’s fields and each reports good grades and that, in fact, the goats produced the $600 income each expected so they met their expenses without any debt. The goats were taken by Jolley and Tony to spend the summer with Ishmael’s larger herd before returning to Norman and Tulsa for Cal and Aron’s second year of university.
Second Year
At the end of the summer Adam again gives each of his sons $400 expecting each will receive $600 this second year from the sale of milk from Ishmael’s goats, to meet their $1000 yearly expenses. When Cal arrives in Norman he finds Ishmael’s servant Jolley with seven, instead of six, goats. Aron arrives at Tulsa to find Tony with only five, instead of six, goats. They learn that Jolley and Tony began their return together with all twelve goats, but separated at the confluence of the Arkansas and Canadian Rivers in a late summer thunderstorm mistakenly dividing the herd into seven and five, instead of six and six. As a result, Cal enjoys an unexpected income of $700 from the goat milk giving him more than needed for his expenses. Aron, on the other hand, receives only $500 from the sale of goat milk leaving him $100 short which he covers with a loan from the university.
After this second year they again return home to work in their father’s fields and each reports good grades and that their income from the goat milk had been $700 and $500, instead of $600 each. During the summer Adam receives a letter from Ishmael stating that due to the poor condition of the grazing fields in his area he has instructed Jolley and Tony to remain with the goats they have in Norman and Tulsa for the summer and the following years.
Third Year
Adam calls his two sons from the fields to share this news and that, since he expects Cal will receive again $700 in milk income and Aron again only $500, he plans to give Cal $300 and Aron $500 so each will have $1000 for expenses their third year. Cal understands, though is still miffed that his father is giving Aron more than he will receive. Aron respectfully thanks his father for making the adjustment to assure he has the $1000 he needs for the third year, but also asks how he is to pay the $100 back to the university for his unexpected deficiency the second year. He goes on to suggest that perhaps Cal could make do with only $200 from their father since he must have saved his unexpected $100 gain. Cal, upset with this suggestion, especially since he spent his windfall already, pushes back telling his father that his generosity to Aron, by increasing his income $100, fully makes him whole for his loss, and that to reduce his (Cal’s) income any more is just not right.
Adam, now somewhat confused by his sons’ arguments, advises that he will consult Ishmael and rely on his sage advice, but they are to return to university with the $300 and $500 as he told them.
Aron and Cal return to university and during the first semester Jolley receives a letter from Ishmael’s wife Parrish instructing him to send the next $100 from the goat milk sales in Norman on to Aron in Tulsa before the end of the second semester. Knowing Parrish’s influence with Ishmael he does as instructed, of course over Cal’s objection. Aron is able to repay his loan from the university; Cal has to tighten his belt the second semester regretting his excess spending the year before. Cal and Aron return home for the third summer to work in Adam’s fields.
Fourth Year
Toward the end of the summer Adam again calls them together to receive their expense money from him for the next year. Since Ishmael’s goats are still grazing seven in Norman and five in Tulsa he announces that he again plans to give Cal $300 and Aron $500 for the next year at university. Cal objects and reminds his father that since $100 of his goat milk income the previous year had been diverted to Aron, he (Cal) had received only $600 in milk income and therefore should receive $400 in aid from his father, as should Aron also since he had actually collected $600 in milk sales the year before. Aron objects to his father saying that the extra $100 only made up for his loss their second year at university and should not be charged against his income for the coming year. He further points out that there still are only five of Ishmael’s goats in Samaria so his expected milk income remains $500, making his additional need still $500.
Confused again by their arguments, Adam asks his sons to return to the fields while he decides what to do.
To be continued.
As always lunch is on me for the first to ID the location of the photo above.