Okay for Private Developers to Take Money from Public Schools?

Midtowner · #1 (**permalink**) 05-05-2006, 11:35 AM

Is it okay for the city to award money to private developers and pay it back out of future school budgets?

For a better explanation, see:

http://www.okctalk.com/oklahoma-law/...good-idea.html

#2 (**permalink**) 05-05-2006, 05:58 PM

tifs right?

Midtowner · #3 (**permalink**) 05-06-2006, 12:34 AM

I thought my first thread was too complex for people to care.

#4 (**permalink**) 05-06-2006, 09:14 AM

At the risk of being banned again, I finally logged on because I felt this thread is very important. Though, I will attempt to not comment on very many threads because I am very concerned about the issues I feel are improtant, and like I said, I feel this is a very important issue, but it appears nobody is interested.

First, let me say, I must have erroneously understood the portions of TIF that took the money---I thought it was only for the city or town that implemented it in an area to take only the portion of the taxes generated after the improvements that would have gone into that city's/town's coffers without affecting the monies that would go to the other taxing entities i.e. schools, libraries, roads etc.

Reading this thread though, it appears that all the monies generated from the improvements are poured back into the project area. Over the past few days, since Midtowner attempted to generate interest by starting this very important discussion, I have tried to research the TIF statutes, but I have not dound them, so I will assume Midtowner knows that all the new monies go to the area. What statutes cover TIF Districts?

For the reasons stated by Midtowner, I consider TIF to be wrong; as he said, it might generate burdens on the schools by new students while the money is withheld.

If one researches all the other ways some city or town sucks off money for special districts, one will find this to be only the tip of an iceburg, but I think the schools---the main recipient of ad valorem taxes at about 66% of ad valorem taxes go to the schools---school districts continually float bonds to do projects, and the people happily go along and approve the bonds at the vote; they never look into where the schools might be losing money through districts like TIF districts.

On the other light, did you know that any lands owned by a city or town is exempt from ad valorem taxes---no matter that the city or town uses the land just as any individual who might own it, yet the individual would not be tax exempt, so he would pay ad valorem taxes that would go to schools and all the other taxing entities?

I will shut up and sign off for now.

Pete

Midtowner · #5 (**permalink**) 05-06-2006, 10:53 AM

In my search of the statutes, I found this interesting section of the Oklahoma Constitution:

Quote:

Article 10, Section 17

§ 17. Aid to corporations, etc., by counties, cities, towns, etc.

The Legislature shall not authorize any county or subdivision thereof, city, town, or incorporated district, to become a stockholder in any company, association, or corporation, or to obtain or appropriate money for, or levy any tax for, or to loan its credit to any corporation, association, or individual.[i](underline supplied)[/u]

But most of this (I think) is under 62 O.S. 850-869. Interesting parts follow:

Quote:

Intent of the Legislature
It is the intent of the Legislature that the provisions of this act be used in accordance with the following guidelines:

from 62 O.S. 852

1. That the tools of this act be used in those cases where investment, development and economic growth is difficult, but is possible if the provisions of this act are available;

2. That the tools of this act not be used in areas where investment, development and economic growth would have occurred anyway and that the governing body take care to exclude areas that do not meet this criteria;

3. That the tools of this act be used to supplement and not supplant or replace normal public functions and services;

and

Section 862

A. A project plan may contain a provision that the increments from certain local taxes or fees may be used to finance project costs in areas qualified under the Local Development Act. The increment from local taxes or fees levied from and after the effective date of the approval of such plan shall be apportioned in the following manner for a period not to exceed twenty-five (25) years or the period required for payment of project costs, whichever is less; provided, however, that for any increment district established after November 1, 1992, such time period shall be tolled for a period of time equal to the pendency of any litigation directly or indirectly challenging the increment district or apportionment or disbursement:

1. That portion of the ad valorem taxes which are produced by the levy at the rate fixed each year by or for each such ad valorem taxing entity upon the base assessed value of the increment district determined pursuant to Section 862 of this title and as to an area later added to the increment district, the effective date of the addition to the increment district, shall be paid to each taxing entity and all or any portion of local sales taxes, other local taxes or local fees collected each year which are not subject to apportionment shall be paid or retained as otherwise provided by law; and

2. All or any portion of:

a. ad valorem taxes, in excess of such amount specified in paragraph 1 of this subsection,

b. the increment of local sales taxes, other local taxes or local fees, or a combination thereof, paid to or for the benefit of the city, town, or county approving the plan, and

c. with its consent, evidenced by agreement in writing, the increment of local sales tax, other local taxes or local fees, or combination thereof, payable to any other local public taxing entity,

shall be apportioned to, and when collected, shall be paid into an apportionment fund established for the project pursuant to the project plan. Such revenues shall be used for the payment of the project costs and for the payment of the principal of, the interest on, and any premiums due in connection with the bonds of, loans, notes, or advances of money to, or indebtedness incurred to finance project costs, whether funded, refunded, assumed, or otherwise, for financing, in whole or in part, eligible project costs. Nothing shall prohibit the increments from being used to directly pay eligible project costs. When all eligible project costs and such bonds, loans, advances of money or indebtedness, if any, including interest thereon and any premiums due in connection with them, have been paid and the governing body adopts an ordinance or resolution dissolving the tax apportionment financing, all ad valorem taxes upon the taxable property within the boundary of such district shall be paid into the funds of the respective taxing entities.

B. If a project plan contains a provision for apportionment as provided in subsection A of this section, and notwithstanding any other provision of law to the contrary, the governing body shall direct in the resolution or ordinance approving the plan which portion of the increments, including whether any or all, to be paid into the apportionment fund shall constitute a part of the general fund to be appropriated annually by the governing body, and which portion, including whether any or all, shall constitute funds of a public entity authorized to issue tax apportionment bonds or notes or to incur project costs.

C. To the extent that collections exceed project costs and the provisions for payment of principal and interest along with sufficient reserves on any bonds issued pursuant to the provisions of Section 863 of this title, the excess shall be paid into the funds of the respective taxing entities unless the taxing entity agrees to some other use of such collections.

D. Except as provided in subsection E of this section, for any year in which taxes or fees are apportioned in the manner specified in paragraph 2 of subsection A of this section, any increase in assessed valuation of taxable real property or taxable personal property within the boundaries of such district in excess of the base assessed value shall not be considered by any taxing entity in computing any debt limitation or for any other purpose except for the levy of taxes and in determining the amount to be apportioned.

E. In the event there is a change in the assessment ratio for ad valorem tax property valuations of property within the boundaries of an increment district, the portions of valuations for assessment pursuant to paragraphs 1 and 2 of subsection A of this section shall be proportionately adjusted in accordance with such reassessment.

F. Nothing in this section shall be construed as relieving property in such project area from being assessed as provided in the Ad Valorem Tax Code of the Oklahoma Statutes, or as relieving owners of such property from paying a uniform rate of taxes, as required by Section 5 of Article X of the Oklahoma Constitution.

G. If property in an increment district is owned by a public trust or public entity and is leased for a private use, the lease shall require the private user to pay ad valorem taxes or an in lieu ad valorem tax payment, whichever is appropriate, on the value of the leasehold.

underlines supplied)

Now, there's a possibility that I have the wrong statute here, but I don't think so. For some reason, I thought that this appeared in the Constitution...

I find the legislative intent part to be very interesting though. It's fertile ground for a future Attorney General to take the good 'ol boys on

Karried · #6 (**permalink**) 05-06-2006, 02:15 PM

Midtowner, thanks for clearing it up.. and you thought the other thread was complex!! LOL Just teasing you - Hi Pete!

Midtowner · #7 (**permalink**) 05-06-2006, 02:16 PM

Yup.. I'll bet it's clear as mud now!

Which is just what these guys want -- the law to be too complex for most Oklahomans to really be able to grasp just how badly they're being screwed.

#8 (**permalink**) 05-07-2006, 09:00 AM

why was oki man banned?

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