‘Twas the Night Before Sine Die

Train at Tulsa Fairgrounds, by Greg Morris–again.

My real intent with this post is not to whine again, see House Bill 2244 and A Turkish de Fright, about the Motor Vehicle Collections debacle that has shifted over $20 million to date from more than half of Oklahoma’s independent school districts to the remaining somewhat less than half.  Here’s a list of all districts, MVC Gain & (Loss).  For most districts this event has not been nearly as significant as the other revenue disruptions over the last two fiscal years caused in no small part by the “starve the beast” advocacy of the Oklahoma Council of Public Affairs, but for many in FY 2016 it was a greater financial hit than their other cuts in state aid.  The only saving grace of this gross distortion is that the funds lost by school districts went to other school districts so are still being used to education children.  My real intent is that recounting what happened two years ago will serve as a caution to the legislature and others about passing laws in the final hours of this year’s session because the culprit House Bill 2244 was passed on the last day of the 2015 session and it did not make clear how the OTC was to apportion to school districts in months when collections were less than the same month the previous year.

A little history (or skip on down to the poem):  Like many other school finance officers during the early months of FY 2016, I knew that the legislature by passing HB 2244 had capped the total amount that could be paid to school districts at the FY 2015 level, thus ending any future growth in that source of revenue.  For the previous twenty years each district’s collections were expressly based on the amount each received the year before and that part of the law, we thought, had remained unchanged.  I had never paid much attention to monthly fluctuations because in my ten years of experience motor vehicle collections had always been steady by the end of the year.  However, in preparing my midyear budget revision I noticed collections were down substantially and began comparing collections experiences with colleagues in other districts.  We quickly learned that while some were well behind, others were well ahead.  We asked our CCOSA leadership to find out what was going on.

The wholly unsatisfactory explanation by the Oklahoma Tax Commission came in February.  I sent a letter contesting the apportionment method being used to the Commissioners which resulted in a meeting with their Executive Director Tony Mastin; Tulsa Public Schools CFO Trish Williams (now CFO for Union Public Schools) went with me.  We had a brief discussion; Tony Mastin explained their method which was, in under-collection months, to ignore the requirement to apportion based on the amount received the same month the prior year, and instead apportion based on ADA (average daily attendance).  I explained my position that the OTC, in under-collection months, should apportion each district the proportion of its prior year’s amount that was available, i.e. if collections are 95% then every district gets 95% of the same month the year before.  My position would allow every district to come close to collecting the amount they were projected to collect, or “charged” with, according to the state aid formula.  He declined to consider my recommendation because he “can’t just make something up.”  I asked Tony Mastin if he understood the impact his method was having on the state aid formula and he said he did.  I asked him if he had consulted with anyone, and he said he had talked with Senator Jolley who was the senate author of HB 2244.

Superintendent Rick Cobb of Mid Del Schools went with me a few days later to see State Superintendent Joy Hofmeister.  We did our best to explain what was happening and why, as state superintendent, she should advocate with the Tax Commission for a correct application of the statute.  I believe she did meet with Tony Mastin about the matter but she never responded further to our requests.  We also learned that our CCOSA representatives Steven Crawford and Ryan Owens were promoting legislation at that time to “fix” the situation by having MVC apportionments done by ADA; they wrongly believed that such a change would not hurt any districts because “the formula would make districts whole the following year.”  When they were shown that is not correct, that their legislative proposal would assure the permanent loss of over $22 million by about half of their client districts, they backed off and said no more about it.

Gaining no traction with those who should have helped us, including many legislators, and believing it best to be fixed before the end of the fiscal year, four districts (Sand Springs, Mid Del, Muskogee and Ponca City) petitioned the Oklahoma Supreme Court to assume original jurisdiction and correct the matter; they declined.   After that decision, as a kind of therapy, I plagiarized the poetic style of “’Twas the Night Before Christmas” and wrote this:

‘Twas the Night Before Sine Die

‘Twas the night before Sine Die, and all through the House,

Not a brain wave was stirring, except that of a mouse.

The bill, drawn by Casey ‘n Spears without care,

So in hopes that Sly Jolley soon would be there.

The orphans were lying all scared in their beds,

While visions of coal lumps rose up in their heads;

Their dorm matron Jolie was near them on tap

While counselors Stefan and Shane were taking a nap;

When out on the floor the bill passed with no chatter

Because the aye voters had no clue ‘bout the matter.

Away from the floor Sly Jolley flew in a flash,

To his little elf Tony who started counting the cash;

But the amount they counted was way, way too low

Meaning the orphans would get less than their much promised dough.

So in each of their thirty-two eyes came a tear

As they awaited their fate with some hope but more fear.

The little elf Tony made something up quick

To apportion the shares in the way Jolley picked.

The elf promised Sly Jolley he’d take all the blame

For tricking their dim lackeys now listed by name:

Stanislawski, Holt, Fry, Crain, Fields, Newberry and Ford,

With Barrington now their orphans would be gored.

‘Cause the elf’s plan was when there’s too little for all

Just give more to Jolley’s faves and let the rest take the fall.

Orphans Eddy, Musty, Unie, Moor, Norm, Bix and Jenk

Were each favored though none more than DeCreek.

So up to the house-top the lackeys they flew

With little elf Tony and Sly Jolley too.

Then in a twinkling they distributed the loot

Most to the faves with insouciance to boot.

The other orphans got only the crumbs from the ground,

So to Jolie, Stefan and Shane they went with a bound.

Jolie was stressed about else from her head to her foot

And couldn’t be bothered to redirect the orphans’ loot.

Stefan, thinking one equals two, said they shouldn’t be hacked,

If they’d just wait a year they’d recoup what they lacked.

Shane would not wake from his nap with dreams so merry

‘Bout being a hero to all by handling nothing so hairy.

So the poor orphans went away with nothing to show

From asking their guardians to help recover their dough.

Poor Tulsey, Lawt, Putney and Bart cringed and wept

Hoping all would be much better after they slept.

But Sandy, Ponca, Musky and Midelly

Knew of this folly they’d had a full belly.

Next door they went to the family Supreme

For help to make things right with the orphan team.

They were met by one at the door who just shook his head

Saying “those lackeys who caused it should fix things instead”.

He closed the door and went straight back to his work

Leaving those poor orphans in their world of hurt.

Feeling now like everyone’s second-hand roses

They still hoped one of the lackeys might be their Moses.

Then Jolley sprung to the floor, to his lackeys gave a whistle

And away they all flew, like the down of a thistle;

But they heard him exclaim, ere he slunk out of sight,

“Sine Die to all, and to all a good night”.

 

Epilogue:

Joined by four other districts, the original four plaintiffs sued the Tax Commission in Oklahoma County District Court where Judge Parrish ruled, “The Court finds that the Plaintiffs presented the correct construction of (the statute)…”, namely that in under-collection months the OTC should apportion in proportion to the prior year’s apportionment amount, NOT in proportion to ADA.  Here is a chart that shows the impact on the sixteen districts I refer to in the poem.

Notice how stable amounts were from FY 14 to FY 15.  Also understand that the prior year amount is the amount each district is “charged” under the formula.  So if a district collects less than the charged amount, it loses permanently, but if a district collects more it gains permanently.  Switching to ADA would be simple and cause no unfair losses and gains IF the chargeable amount in the formula were also projected by ADA—but few, and none able to affect change, apparently ever understood this.

The Tax Commission has appealed the case to the Oklahoma Court of Appeals, where it waits with an automatic stay of the lower court’s order in place.  Meanwhile the passage of SB 476, unless saved by the appellate court’s action, assures the eventual gain/loss of about $23 million will be permanent.  Be careful this week.

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