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A Funding SNAFU

December 18, 2014

Earlier this week State Superintendent Janet Barresi sent all public school email addresses a Christmas card. Then came the warning that we better take our TLE and like it. This afternoon, she sent schools a message that is going to take a while to soak in.

Superintendents:

The time for calculation of the midyear adjustment is upon us. I wanted to alert you to changes in the calculations of the midyear and a possible delay in the release of the midyear adjustment.

Earlier this fall, the Department became aware of a statutorily required cap in the formula dealing with agricultural and commercial personal property. The calculation, as prescribed in law, requires that the Department cap these two segments of personal property at 11 percent. The Department historically has not applied the statutory cap on commercial and agricultural personal property.

We believe that plain language of the statute requires the Department to place the 11 percent cap on commercial and agricultural personal property.

The Department faces a number of challenges in applying this cap to the state aid mid-year allocation. The State Department of Education (SDE) has been in communication with the Oklahoma Tax Commission (OTC) and has been told that the information needed to apply the statutory cap may not be available until mid-January. If the Department were to delay the midyear adjustment until we obtained the needed information from OTC, the SDE would risk violating its own statutory Jan. 15 deadline for release of the midyear adjustment.

It is important to note that this language was placed in the statute in 1992 when the formula used prior year Ad Valorem even though the OTC was not able to provide that specific data by districts at that time. When the formula was changed to use current year Ad Valorem this section was not adjusted, creating an inherent conflict in the two provisions of law. The statutes require the Tax Commission to provide to the SDE the data needed to implement the statutory requirement. Until this year, the data has not been provided to the State Department of Education by the Tax Commission in order for the Department to impose the cap on commercial and agricultural personal property.

We currently do not know the outcome of this redistribution, but we wanted to alert you to the possibility of an unanticipated change in your districts calculations and a possible delay in the receipt of the mid-year allocation.

We will calculate the midyear adjustment using the capped Ad Valorem and post the midyear allocation as soon as we receive the necessary data.

School districts will receive their Jan. 15, 2015, payment.

Janet C. Barresi

State Superintendent of Public Instruction

The short version of this is that a small part of the funding formula has been miscalculated for more than 20 years. I don’t know how much of that can be rectified or how that will impact already strapped public schools, but this could be catastrophic. As the Tulsa World report stated, this could be a windfall for some districts and disaster for others.

Merry Christmas, #oklaed! Hallelujah! Where’s the Tylenol?

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  1. December 28, 2014 at 10:18 pm
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