Schools granted greater financial control


FOR IMMEDIATE RELEASE:
Contact: State Rep. Mike Wilt
Capitol: (405) 557-7358
Contact: State Rep. Mike Wilt
Capitol: (405) 557-7358
Bartlesville: (918) 336-3228

Schools Granted Greater Financial Control

OKLAHOMA CITY - Legislation allowing schools the flexibility to
financially prepare for potential budget shortfalls has received the
approval of the Oklahoma House of Representatives.
Senate Bill 531, by State Sen. Scott Pruitt and State Rep. Mike
Wilt, would increase the amount of money schools can hold in "carryover"
accounts so they can pay bills throughout the year.
"This bill will give schools much-needed financial flexibility
and empower local districts to better manage emergencies," said Rep.
Wilt, R-Bartlesville. "It will also address the problems created by the
slow pace of ad valorem tax collections, which typically don't go to
local districts until January after the school year is half over and
budget plans are set in stone."
The provisions of the bill would allow schools with annual
budgets of $6 million to $8 million to carryover an amount equal to 18
percent of the previous two consecutive years' budgets.
Schools with budgets of more than $10 million would be able to
carryover 14 percent of the previous two consecutive years' budgets.
Currently, schools with budgets of more than $10 million are
allowed to keep between 8 percent and 15 percent of the previous year's
budget in reserve.
Schools with budgets of less than $10 million are currently
allowed to keep between 40 percent and 16 percent of the previous year's
funding in a carryover account with the percentage declining as the size
of the budget increases.
The percentage of carryover granted smaller schools would remain
unchanged if Senate Bill 531 becomes law, but would now apply to the
previous two years' budgets instead of just the previous year's numbers.
The only exception would be schools with budgets between $6 million and
$8 million, which would also be granted a larger percentage of
carryover.
The proposal was developed in part by a special legislative task
force and is designed to ensure schools can cover several months of
payroll in times of financial difficulty.
Supporters of the legislation noted that the budget year begins
in July but most schools do not receive state aid until later in the
year. As a result, schools often struggle to cover payroll and other
overhead during the summer months, making carryover funds vital.
"Schools do not get state aid in the month of July," Wilt noted,
"but they still have to pay teachers, janitors, administrators, and
maintenance bills."
By increasing the amount of carryover available, he said
lawmakers make it less likely teachers will go without a paycheck.
Senate Bill 531 passed the House on a strongly bipartisan vote
of 98-2 and is headed for the governor's desk.

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