That sinking (fund) feeling; will Bartlett Jr get a slush fund?

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UPDATE 2011/04/04, 11:00 pm: HB 1992 did not come up for a vote today; it is on the Senate calendar for April 5. There's still time to call or email your state senator. My state senator, Gary Stanislawski, told me he plans to vote against HB 1992.

UPDATE: HB 1992 was killed outright on April 12 in the Senate. Some senators who opposed the language (like Sen. Stansilawski) voted for the bill with the title struck, which would have moved the bill to a conference committee where the objectionable material could have been removed.

A point of pride for me as an Oklahoman is that politicians here can't raise taxes on us without asking our permission. That distinctive advantage is currently under threat because of a bill that has already passed the State House and which comes before the State Senate later today.

A bill in the Oklahoma legislature, HB 1992, would allow a city to pay operational costs out of the sinking fund -- property tax revenues set aside to pay general obligation bonds for capital improvements and court judgments. While there's some merit in diversifying the revenue base for Oklahoma municipalities, the current proposal would allow city officials to divert property tax funds from their intended purpose, resulting in an effective increase in property taxes without a vote of the people.

Instead of carrying over any sinking fund surplus as a reserve against future lawsuit settlements or to pay down G.O. bonds, city officials could transfer the money without the voters' permission, and property taxes would have to go up by the same amount to fulfill future G.O. bonds and settlements.

While cities can currently claim a sinking fund surpluss if they have absolutely no outstanding lawsuits or bonds, HB 1992 allows them to pretend that scheduled bond and settlement payments in future years don't exist for the purpose of declaring and claiming a surplus in the current year.

(It's bad enough that city officials already have an incentive to capitulate in the face of a tough lawsuit. Fighting a suit drains money from the general fund, but settling means money comes out of the sinking fund, which is replenished by raising the property tax rate without asking the permission of the voters.)

What's worse, the bill changes who is authorized to request the funds from the county excise board. Currently, such a request (under the very limited circumstances allowed by current law) must come from the governing board (usually the city council). The new law changes the language to "governing board or, with respect to a municipality, either its governing board or a municipal official authorized by law or city charter to act upon behalf of the municipality." I suspect the intent is to allow the mayor to pursue this money without the consent of the City Council, since the mayor can by charter and statute act on behalf of the city in many regards. So not only do we have a tax grab here, it looks like it may be a power grab as well.

And it gets worse: In Section 2, this "municipal official authorized... to act upon behalf of the municipality" would be given the power unilaterally to spend this money on "funding the planning and development of capital improvements or professional services, or... to create an economic development fund, or to fund information technology improvements, or energy-efficient improvements to public buildings...." Previously, the surplus money could be either spent to construct public buildings or returned to the voters through reduced property tax rates.

Keep in mind that "professional services" (e.g. bond advisors, attorneys) are not subject to competitive bidding requirements.

AND IT GETS EVEN WORSE: The bill repeals the section of the current law that requires the city to file an application for the surplus funds in district court and gives any taxpayer, bond holder, or judgment holder the opportunity to contest the application.

Tulsa County Assessor Ken Yazel is sounding the alarm on HB 1992. From the April 1, 2011, Bixby Bulletin:

Tulsa County Assessor Ken Yazel today is making public his opposition to House Bill 1992, which allows cities to transfer the property tax surplus in their sinking funds to their general revenue fund, where it can be spent however the city wants....

The property tax surplus in the City of Tulsa sinking fund for fiscal year 2011 is $11,820,230. If House Bill 1992 was already law, property taxes this year in the city would increase by 3.82 mills, or $59.20 on a $150,000 home....

The City of Tulsa's sinking fund request to the County Excise Board for FY 2011 was $64,837,708. After deducting the surplus of $11,820,230, the Excise Board approved $53,163,129.

If the law allowed the City of Tulsa to sweep the $11,820,230 surplus into its general fund, the Excise Board would have approved $64,837,708. The difference would have to be made up by an increase in the property tax millage - 3.82 mills in this instance.

A reserve in the amount of 10% of a sinking fund request is allowed for uncollectables. Since nearly 100% of all property taxes are collected - through property sales by the county treasurer if necessary - this 10% "reserve" eventually becomes "surplus". The result is a permanent tax increase on the citizens of Tulsa.

From fiscal year 2010 to 2011, the City of Tulsa sinking fund request increased by over 20%. If House Bill 1992 passes, next year the City of Tulsa sinking fund will increase again by over 20%.

Two midtown Tulsa Republicans, Rep. Dan Sullivan and Sen. Brian Crain, are backing this bill, which comes before the State Senate today. To register your opposition, contact Senate President Pro Tempore Brian Bingman's office at (405) 521-5528 or check the Senate website to locate contact info for your state senator.

MORE:

Text and status of HB 1992

The current law: 62 O. S. 445, 62 O. S. 446, 62 O. S. 447

Ken Yazel will be on 1170 KFAQ at 8:05 am to discuss the bill.

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6 Comments

Bob said:

Excellent article, Michael.

You, Tulsa County Assessor Ken Yazel, and only a few others are sounding the alarm about this prospective tax grab.

Notice that it is the GOP that is facilitating this tax increase? The GOP Leadership Wheeler-Dealers have supplanted the True Believers in our state legislature, lead by a certified RINO in the Govenor's mansion.

The Tax Vampires never, NEVER quit. They merely re-group, re-strategize and re-package failed tax packages. It took our local tax vampires three attempts to get an Arena tax passed.

When the Kaiser River Tax failed in Oct. 2007 by a county-wide margin of 52.5% NO to 47.5% YES, it created has-beens of River Tax Cheerleaders Mayor Kathy Taylor and County Commissioner Randi Miller.

However, for their political puppet masters, the 47.5% YES vote meant that they only needed to find another measley 6,300 voters. Vacumning local nursing homes, the Day Center for the Homeless, John 3:16 Mission, and the Tulsa County Jail of potential voters may garner a sufficient YES margin.

Taylor and Miller's usefulness over, they have been replaced by new tax vampires Mayor Dewey Bartlett, Jr. and Commissioner Karen Keith.

How long before the River Tax advocates are back at our throats advocating Kaiser River Tax II?

Roy said:

Can't look now without paying (heh), but I wonder what the World(didn't)write regarding this bill.

Brandon said:

I noticed my state representative voted for this. He was surprised when I told him the possible implications of this bill. The way you depict this bill on Batesline is not how the bill is being presented to the house and senate.

I was told by my representative that he would be voting no when it comes back.

Never was called back by my state senator.

Thanks for sharing your experience, Brandon. There are hundreds of bills filed ever session, and many of the votes a state legislator casts are based on trust: If a colleague you trust says this bill is OK, you'll vote yes without researching the issue yourself. That's just one reason why it's not enough to elect good people to office; you have to continue to keep up on the issues and be as present to them as the lobbyists and bureaucrats are.

Roy said:

I contacted Brian Crain. Noted that his ciriculum vitae suggested he favored the idea that laws re gov't have primary purpose restraint on gov't. Observed that HB1992 accomplished the opposite. Have gotten no reply.

Bob said:

Actually, while the 2007 vote difference was 6,300 votes, the Kaiser River Tax vampires only need to vacumn 3150 + 1 vote to get over the 50% threshold for a victory.

Be assured they will target every nursing home, the Salvation Army Day Center for the Homeless, John 3:16 Mission, and the Tulsa County Jail to vacumn every possible vote.

It's amazing the poll results you can get from a handout of a few packs of cigarettes.....

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This page contains a single entry by Michael Bates published on April 4, 2011 12:52 AM.

Whirled behind the wall was the previous entry in this blog.

Oklahoma municipal elections, school runoffs today, April 5, 2011 is the next entry in this blog.

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