Sitting on a Mountain of Cash, CareerTechs Don’t Need More Money
November 7, 2011
Like most other agencies of state government, the Oklahoma Department of Career and Technology Education (CareerTech) has been known to complain about budget cuts and to request greater and greater sums of taxpayer money. But what most Oklahomans don’t realize is that the local technology centers governed by CareerTech are already sitting on a veritable mountain of cash.
Here’s how it works. A major source of revenue for school districts and technology centers is the ad valorem tax, or property tax, which is allowed by Article 10 of the Oklahoma Constitution. The level of support technology centers receive from property tax sources varies based upon what was approved for the technology centers through a vote of the people in the district. Support from property tax is capped at five mills for the general fund, five mills for the incentive fund for operations, and five mills for the building fund, although not all technology center districts have voted the full millage levy.
The use of building funds is generally limited to “erecting, remodeling or repairing buildings and for purchasing furniture.” Partially because of this provision, and because of economic growth in several areas of the state, total CareerTech building fund carry-forward balances have increased from $36.8 million in FY 2001 to $106.1 million in FY 2011. This enormous fund growth—161 percent adjusted for inflation—has resulted in technology centers across the state being forced to make building purchases or improvements that they do not need, while other potentially worthwhile expenses are neglected. This is like a family being forced to use a savings account to by a new home, when mom or dad just lost their job and the family needs to buy groceries.
So what’s the solution? For starters, CareerTech does not need more money from state legislators. Indeed, judging by the many CareerTech palaces with empty parking lots, the case can be made that they need less money. But what is needed is a constitutional amendment allowing technology centers to use the existing local-district voting process to reallocate the total millage for technology centers as their local citizens and their elected officials see fit. This allows for local control and removes the need for more state funding. Then CareerTech can adjust its state allocations to local technology centers, saving millions of dollars in state appropriations and allowing for wiser use of local property taxes.
Jonathan Small, CPA, is OCPA’s fiscal policy director.