Sen. Rabon Says State Must Repay Debt to Counties

Before state lawmakers start making plans for future tax rebates, cuts or other expenditures, they must repay millions of dollars owed to Oklahoma counties. That’s according to State Sen. Jeff Rabon who said repaying the counties must be a top priority in the 2006 legislative session.

“The bottom line is we owe about $15 million dollars to counties for reimbursements that haven’t been made during the past three years. This is money those counties depend on to fund local government, schools, health departments, libraries and career-techs,” said Rabon, D-Hugo. “Before anyone starts dreaming up new ways to spend surplus revenues, we need to pay our bills.”

The money is owed due to various ad valorem tax breaks approved starting in 1985. The exemptions were aimed at attracting business and jobs to the state at the height of the oil bust. As more exemptions were added in later years, including double homestead exemptions, the original one percent of state income taxes that was earmarked to repay counties for the lost ad valorem taxes was not enough to cover what was owed. In 1986 the tax exemptions totaled $143,000, but by fiscal year 2004, they jumped to $51 million. Officials with the tax commission estimate that total to reach $57 million this year.

“How can anyone in good conscience be talking about additional cuts or rebates when we’ve left our county governments and services hanging like this? Before we talk about putting limits on growth revenue, tax cuts, or funding any new programs, we need to do right by our counties,” said Rabon.

“In the coming months I am going to do everything in my power to ensure this matter gets the attention it deserves by our legislative leaders. I am mystified by all the people who say they want to run government as efficiently as a business and then they want to spend the revenues on everything but the bills that are owed. An operation like that wouldn’t stay in business long.”

Some counties are reportedly considering legal action to force the legislature to pay what is owed.

“It shouldn’t take legal action or a constitutional amendment to do what is right. There should be an absolute legislative agreement to pay our debts first when we’re writing the state’s budget,” Rabon said.