| April 4, 2012

State could save millions with CareerTech reform

Following is an excerpt from OCPA’s Proposed State Budget for the Fiscal Year ending June 30, 2013.

With Oklahoma government spending at an all-time high (see chart), the time has come to set priorities and to exercise spending discipline. CareerTech is no exception.

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 (a mill = 1/10th cent), 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 buy a new home, when dad just lost his job and the family needs to buy groceries.

CareerTech does not need increased state appropriations. What is needed is a constitutional amendment and statutory changes 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.

The potential savings from implementing such reforms would be more than $3 million annually.

Submitted each year by the Oklahoma Council of Public Affairs, Inc. to the taxpayers of the State of Oklahoma and their elected Officials, the OCPA “Budget Book” is carefully crafted by Fiscal Policy Director Jonathan Small to help lawmakers set priorities and exercise spending discipline while creating a state budget that respects your family budget. Offering unmatched fiscal policy analysis and recommendations, Small draws on his experiences as a former budget analyst for the Oklahoma Office of State Finance, former fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and former director of government affairs for the Oklahoma Insurance Department to provide perspective on the state budget that you cannot find anywhere else.

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