Chouteau school deficit growing

Susan Writer Staff Reporter

CHOUTEAU — With the arrival of July, a new fiscal year began in the Chouteau-Mazie School district. While previous numbers indicated that the deficit was lower than earlier estimates, those hopes are beginning to fade as final numbers come in.

“As of last week, the deficit number is around $266,000,” Superintendent Art Schofield said.

The reason for the jump is some of the funding that was anticipated and budgeted in the previous year did not arrive by the fiscal year end.

“There were several reasons, such as insurance claims that were expected that didn’t arrive,” he said.

The deficit was first revealed in May during a special board meeting called to discuss the problem. Previous Superintendent

Dr. Lisa Horn said the reason for the shortfall was “REA tax collections.”

There are many variables that make up school funding, but what exactly is REA tax collections and how do they figure in?

“There are three main sources of funding for schools,” Schofield said. “Federal, state and local.”

The “REA Tax” in a school budget refers to the Rural Electrification Association Cooperative Tax.

In a detailed explanation of Oklahoma school funding, Jeffrey Maiden, Ph.D. describes the R.E.A. Tax as “revenues in lieu of property tax collections, distributed in proportion to the number of miles of transmission lines within each district.”

According to the Oklahoma Association of Electric Cooperatives (OAEC), because Rural Electric Cooperatives (RECs) are non-profit, they pay no income tax.

“However, they do pay a two percent gross receipts tax (at both the retail and wholesale level) to the state, which is distributed to local school districts relevant to the miles of line in each district,” they stated.

There are 28 RECs in Oklahoma and two in Arkansas that make up the OAEC.

Clint Branham, Communications Specialist for Northeast Oklahoma Electric Cooperative, explained that REC (as it is often referred to), contributed a total of $1,061,862.76 in gross receipts tax to the state in the fiscal year ending May 2009.

That amount was distributed to 35 different schools and was calculated based on the miles of line we own/maintain in school districts within our service territory, he said.

“Of this amount, Chouteau-Mazie schools received $30,137.33,” Branham said. “It is important to note that there are multiple utilities with lines serving this corner of our state.”

Schofield said that in the 2008-2009 fiscal year, the estimate of REA Co-op Tax collections for their school was $1,317,207.81.

This amount was calculated based on all of the various electrical cooperatives with lines

in the district. Actual collections that year were $1,586,594.31, which became the estimate for the 2009-2010 school year.

“They didn’t collect them all and with last year’s budget not allowing for error, it became the perfect storm,” Schofield said.

The more a school district receives from local revenues such as ad valorem (or property tax) and REA Co-op tax, the less they receive from the state.

Good news for the district in light of anti-cipated state budget cuts for the upcoming year.

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