State Senator and former classroom teacher Nancy Riley says Oklahoma schools could be hit by even more revenue cuts due to property tax breaks intended to help the economy. The Sand Springs Republican has asked the Attorney General to look into the constitutionality of the law that was supposed to guarantee schools and other public entities would be reimbursed for those tax breaks.
Senate Bill 828 expanded the number of businesses that could receive property tax breaks in order to encourage economic development. The losses in property taxes were to be offset by an Ad Valorem Reimbursement Fund, which is funded through a portion of state income tax collections.
"In years past, there has been more than enough money in this fund, but with the downturn in the economy, there isn't enough money for schools, libraries and other entities depending on this reimbursement. In fact, they could be looking at a 50 percent reduction. That's on top of the serious budget cuts they're already facing," explained Riley.
"Do the businesses still get this tax break? How will the state fund all the reimbursements even though there is not enough money in the account set aside for this purpose? I think the situation raises several critical questions that need to be addressed. That's why I've asked the Attorney General for an opinion on the legislation," said Riley.
In the meantime, Senator Riley said she has begun working on legislation to deal with how the existing funds should be distributed.
"If we are forced to simply distribute what is in the fund, I think it is crucial to be prepared with a plan to prioritize what money we do have available," commented Riley, who said she would be prepared to introduce the legislation when the 2003 session gets underway.
"The Attorney General's opinion may give us an indication of what needs to be done, but if not, we need to be ready to deal with it in the legislature," said Riley.