A group of school districts won a case Friday against the Oklahoma Tax Commission, and it could change how millions of dollars are distributed.
Oklahoma schools get a chunk of every vehicle registration and excise tax paid to the state. Last year, lawmakers changed the formula and the Oklahoma Tax Commission had to interpret how to divide those motor vehicle taxes.
But the way it was applied cost some schools hundreds of thousands of dollars. Other districts unexpectedly got a windfall of more than a million dollars, including Edmond and Moore. Eight schools sued the OTC, claiming the new interpretation unfairly took money from districts that had slow growth in their student population, The Journal Record’s Dale Denwalt reports:
Before the 2015 law, if the vehicle collections were down, the OTC would dip into vehicle tax collections earmarked for the general revenue fund. Attorney Gary Watts said that the OTC should have based the payout on the percentage of collections compared to last year. For example, if vehicle tax collections fell by 10 percent, so would the disbursement to schools. Instead, the OTC handed the money out based on average daily student attendance. Schools that grew in size saw bigger checks – collections sent to Deer Creek Public Schools went up by 219 percent, according to data gathered by the plaintiffs. Edmond and Moore districts received an extra $1 million. Meanwhile, Sand Springs Public Schools lost nearly $300,000 because the district wasn’t growing as fast, said Watts, attorney for the plaintiffs and longtime representative of the school.
On Friday, Oklahoma County judge Patricia Parrish sided with the schools. Her ruling only requires the state to adopt the schools’ interpretation of the law for the future.
Bob Nance, attorney for the schools, said no one else is knocking down the door to sue the OTC, and no other school joined the lawsuit on the OTC’s side. “There are districts out there that have gotten more, in part because we have gotten less,” Nance said. “We had no indication there’s anybody who really wants to come forward and back the Tax Commission’s argument. In order to resolve this, we don’t need 400 districts in this courtroom arguing about how it gets resolved.” Parrish ruled that the other districts in the state wouldn’t have to join the lawsuit to be affected by her decision. The judge also ruled in favor of the plaintiffs and adopted their interpretation. “I do think the Tax Commission did their best, but I don’t think the steps were followed appropriately,” Parrish said during the hearing.
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