Jeff Raley along with Tommy Thompson and A.D. Anderson representing the Floyd Law Firm based out of Norman were in Jay during Tuesday's County Commissioner meeting to offer an explanation of sales tax and bond financing. The topic concerns the possible passage of a half-cent sales tax increase to fund the $13.5M settlement on Delaware County.
Raley said anyone can go to the Oklahoma Tax Commissioners website and pull the numbers for Delaware County to see how much sales tax as been collected month by month for years. While the payment of the settlement doesn't go into effect until 2013, residents in the county need to determine a funding source to start collecting those monies now.
He told the group that the money collected from sales tax would go into a trustee bank, who would hold the funds. The monies collected would not go toward anything county related except the settlement. Once these monies start coming in, bonds will be written and sold on the market to businesses, banks and individuals.
According to Raley, they figure both sales tax collections on a lower base, but any increase in sales tax will go toward the debt and could be paid off well within the 17 year limit.
Commissioner for district #1 Doug Smith said that if the settlement is paid for by ad valorem taxes the money doesn't go anywhere except the trust bank. If the sales tax passes, these monies will recycle throughout the county.
It was brought up that there is a difference between property tax and ad valorem tax. Property tax is the amount you pay on your real estate. Ad Valorem is the property tax along with all the items you own such as boat house, out building, chicken house, barns, any improvements you have made to the property, according to Raley.
Raley went on to add that most settlements within the state are paid with a sales tax. “Ad Valorem taxation could mean that some people will lose their home, it's not a good deal,” he advised.
There is also talk that people think that the voters will have another chance to remedy the “economical whipping” the county is taking.
“We have never entertained any other option except the sales tax increase. This is the only chance we are going to have to keep from having the settlement paid for by default, which is the ad valorem tax. Period,” said Commissioner Smith. “It will be decided one way or the other on April 3. There will not be another chance.”
Commissioner Billy Cornell, district #2, told the group, “We could have walked away, we didn't have to call for an election. We could have just let it be paid by ad valorem. Give us some credit for trying to do what's best for the residents of the county.”