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Commissioners split on plan to redirect portion of children’s center tax

By Traci Chapman

In a split vote, Canadian County Commissioners on Thursday authorized a formal resolution draft that would redirect a portion of sales tax historically allocated to the children’s justice center to other capital improvements.

District 2 Commissioner David Anderson made the motion, seconded by District 3 Commissioner Jack Stewart, authorizing Assistant District Attorney Paul Hesse to draft a resolution addressing the use of the .35 of one cent sales tax dedicated to the Gary E. Miller Canadian County Children’s Justice Center since it was approved by voters in 1996. Anderson proposed 14 percent of that tax be used for “capital improvement needs of the county,” while 86 percent of it would continue to fund the center. The division would apply to both funds held in county sales tax accounts now, as well as those collected in the future.

District 3 Commissioner Jack Stewart (Traci Chapman/Gazette)

District 1 Commissioner Phil Carson voted against the motion.

Carson suggested drafting a ballot that would give voters the choice to either simply amend language concerning the use of sales tax to include operations or divert some of the tax for capital improvements. Hesse discouraged that move, saying it would cause voters confusion. The commissioner also proposed that a portion of both sales tax currently held in reserves – anticipated by commissioners to reach about $7.2 million by the time residents vote on the matter in February – and future tax collections be split. Carson suggested 50 percent of the roughly $7.5 million be diverted to capital improvements, with another 50 percent of “unexpended funds that exist at the end of each fiscal year” also allocated to those improvements.

Anderson countered with a proposal which would also split the existing funds 50/50 between capital improvement fund and the children’s justice center, but that 80 percent of all unexpended sales tax, not to exceed 20 percent of the total collected in any one year, should be allocated to capital improvements, with 20 percent dedicated to the children’s justice center.

When Carson refused to vote in favor of the proposal, Anderson reverted to the 86/14 percent split, which he first proposed Monday.

Carson was not alone in his opposition to the resolution approved by Anderson and Stewart. Children’s justice center co-director Bill Alexander said he felt including the component of splitting the tax on a ballot necessary to keep the center open was unfair to voters, particularly in light of a 2011 election where voters rejected diversion of part of that tax to fund a county jail.

“I think there’s a real problem, it’s not fair to voters – you’re coercing the voters,” Alexander said. “You’re diverting taxes on something they voted ‘no’ on three years ago, and they have to vote for it to keep the center open.

“People want to save the children’s justice center but they don’t want diversion,” he said.

What that translates to for the children’s justice center is a decrease in funds immediately available for reserves, emergencies and carryover. For example, if the county collected $6 million in sales tax during the fiscal year and only utilized $4 million of that tax for its operations, $2 million would be split – with $280,000 of it going to county capital improvements and $1.72 million available to the children’s justice center for reserves, carryover and the like.

Of $7.2 million anticipated to be held in sales tax accounts by mid-February, $1.008 million would go to commissioners’ for capital improvement use, and $6.192 million would remain in children’s justice center coffers, if Anderson’s proposal is approved by voters.

Commissioners took the action after meeting more than seven hours this week on the issue. After first discussing the matter during their regular Monday meeting, they recessed and reconvened twice – on Tuesday and again Thursday – to come to a resolution. The sessions were necessary as the clock was ticking on a deadline of Dec. 10 to file ballot language with the Canadian County Election Board. Voters will consider the proposal in a Feb. 10 election.

The issue came to light Oct. 31, when the Oklahoma Attorney General’s Office issued an Opinion stating the sales tax allocated to the children’s justice center and utilized for operations – including salaries, programs and all other expenses – could not be used for those purposes. According to that Opinion, only a very limited range of items, including construction and maintenance of the center’s buildings, could be funded by sales tax.

The Opinion was requested by Sen. Ron Justice, who did so at the behest of commissioners, Stewart told attendees of a Canadian County Republican Party meeting held last week to discuss the issue.

“When we were being audited, the questions came up about mingling funds between sales tax and contracts and also about how the sales tax was being used,” Stewart said. “We needed an answer about it.”

AG opinions must be requested by a member of the Oklahoma legislature.

In the wake of the Oct. 31 Opinion, officials scrambled to find a way to fund an $8.1 million children’s center budget without sales tax. The center has historically been funded by the tax, as well as state and county contracts, totaling about $2.5 million annually. Officials learned in July those revenues would be slashed by more than 50 percent due to state budget cuts. The center’s 2015 budget provided for $1.2 million in contract revenue.

After years of sales tax collection increases, the last two years have seen a dip on those revenues. Last year, sales tax was projected at $6.05 million; revenues actually came in at just over $5.584 million, according to county financial documents.

Hesse will now draft a formal resolution, which will be presented to commissioners for their formal approval during the regular Dec. 8 meeting.

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