Ad valorem tax reimbursement manufacturers tax credit.

              INTERIM STUDY REPORT
A & B Education
Rep. Lee Denney, Chairman
Oklahoma House of Representatives
Interim Study 11-039, Rep. Harold Wright
(Combined with IS11-049 – Ad Valorem for Reimbursement Fund, Rep. Kouplen)
November 1, 2011
Ad Valorem Tax Reimbursement Manufacturers Tax Credit
Representative Harold Wright
Harold.Wright@okhouse.gov
• Made opening remarks stating the issue of Ad Valorem Reimbursement to school
districts became a concern very early in his time as a Member of the House
• School districts have difficulty budgeting when distribution of this revenue to school
districts get delayed
Representative Steve Kouplen
Steve.Kouplen@okhouse.gov
• Concurs with Representative Wright- sees this as an issue that requires attention in his
district
Jeff Spelman
Director, Ad Valorem Division, Oklahoma Tax Commission
jspelman@tax.ok.gov
• Provided overview of Ad Valorem Reimbursement Fund from its inception in April,
1985
• Original theory was that the fund would pay for itself with the 1% income tax set aside to
offset property tax losses
• The Fund supported itself all the way through the 1980’s, but in recent years has had to
be supplemented by appropriations from the Legislature
• June 30th marks the first annual payment to the districts, but as there’s a shortfall in the
Fund, the Tax Commission has to wait until the balance rises before it can fully
reimburse all districts’ claims; last year, full reimbursement was not made until April
• Considers Oklahoma fairly unique, as not all states provide such reimbursements
Jeff Spelman Presentation
Bill Seitter
Superintendent, Weatherford Public Schools
• Explained how not getting reimbursements funds in the same year it was claimed can be
detrimental to a school district
• Briefly detailed reimbursement timeline (see Seitter presentation)
• Highlighted the importance of carryover, especially for districts with high gross
production revenue. Gross production is a volatile source of revenue, meaning levels can
vary greatly from year to year, creating a cash flow problem. Carryover helps districts in
this situation with consistent budgeting. When placed in this context, the lack of ad