Guthrie Superintendent Dr. Mike Simpson shared some “painful” news with school board members in their regular scheduled board meeting on Monday evening. Simpson says the school district could possibly be out over $400,000 next school year and over a million dollars in bonding capacity due to a recent tax reduction.
On Dec. 31 Logan County Assessor Tisha Hampton announced Logan County property owners would pay significantly less in yearly ad valorem taxes. Hampton, who becomes the first County Assessor in Oklahoma to lower an assessment ratio since the state question was approved in 1996, lowered the real property tax from 12 percent to 11 percent and the personal property tax from 12 percent to 10 percent.
Hampton supplied an example: a resident of the Guthrie school district who owns a home valued at $150,000, and who claims homestead exemption, will experience a decrease from $1,297 to $1,183 ($114 difference).
Simpson says Logan County was at the assessment ratio for real and property tax of 12 percent for decades. The tax decreases began on Jan. 1 of this year and can only be increased through a county-wide vote.
The tax decrease affects the Guthrie, Coyle, Crescent and Mulhall school districts with less capital beginning with the 2014-15 school year.
Along with the public schools, county rural fire departments, the Logan County Sheriff’s Office, County Commissioners, Meridian Vo-Tech and Francis Tuttle will all also see financial cuts.
“These cuts, that we are going have to absorb, will be without changing our personnel. How does it look? We don’t know,” Simpson said, but added “we will look at every direction we can to keep it out of the classroom.”
Simpson, along with Asst. Supt. Dennis Schulz, utilized a school finance advisor from the state, a contract treasurer for school districts and two chief financial officers from other school districts to verify the accuracy of the estimated numbers for the next school year.
The final result for the Guthrie school district comes in at an estimated loss of $407,765 which will come out of the general fund property tax revenue ($349,864) and the building fund property tax revenue ($57,901).
“At the time, I did not have the understanding that it would affect our general fund and our building fund but it does,” Simpson added.
In addition, the bonding capacity is estimated to take a reduction hit of $1,130,879 from $13,005,738 to $11,874,859.
“That changes greatly some of the things the Long Range Planning Committee has been considering. (It also) changes a lot of the financing options that we have to try and accomplish what we are trying to do,” Simpson said.
Simpson told board members that Hampton did not indicate and understand the tax decrease would affect the bonding capacity.
Superintendent learns about tax deduction through article
Simpson said he first learned of the possibility of the tax deduction last October and contacted Hampton about the issue. Simpson says he then asked Hampton to keep him aware of any possible action.
On Dec. 31 Simpson found out about the tax deduction through an article seen here on Guthrie News Page (Logan County property taxes set to fall by 8 percent). On that day, Simpson contacted Hampton requesting why he was not informed of the decision before hand.
Simpson states Hampton mailed a letter dated on Dec. 23 to the administration office. However, the school did not receive any mail from the dates of Dec. 20 to Jan. 6 because of the Christmas holiday.
According to Simpson, Hampton told him, by law, she was not required to send the letter, but did it as a favor to the school.
Logan County now below surrounding counties?
Hampton stated that at 11 percent on real property, the reduction brings Logan County’s real property assessment ratio in line with the neighboring counties of Oklahoma, Payne, Lincoln, Kingfisher and thirty-five other Oklahoma counties.
“These cuts are painful and the real challenges we have had is very little warning and very little announcement.”
Hampton made it a goal for Logan County residents to be on a more level playing field.
“It wasn’t right for Logan County residents to endure higher taxes than their neighbors in surrounding counties,” Hampton explained. “By lowering taxes, we do right for current residents and stop the policy of punishing those who choose to move to Logan County from neighboring counties.”
However, school officials say Logan County is now below each of the four surrounding counties when it comes to personal property assessment ratio of 10 percent (which was at 12 percent).
The school district said they took a look at the Oklahoma Tax Commission’s 2013 Equalization Study and it shows Oklahoma County at 13.75 percent, Lincoln County 12 percent, Payne County 11.40 percent and Kingfisher County at 11 percent.
The study goes on to say the state’s average personal property assessment ratio for all 77 counties is 11.91 percent.
Oklahoma law requires real property tax between 11 and 13. 5 percent and personal property tax between 10 and 15 percent.
County superintendents set to met with County Assessor
Simpson announced the Logan County superintendents will met with Hampton on Thursday.
“Better understand what considerations were made for the decisions and what financial studies were considered.”