Claremore Daily Progress

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June 23, 2012

Sales taxes increase of 1/3 cent sought

CLAREMORE — Rogers County voters face a decision Tuesday of increasing the county’s sales tax to pay a court-ordered $22.5 million judgment.

County Commissioners Mike Helm, Dan DeLozier and Kirt Thacker placed the item on the June 26 ballot to provide a vehicle to pay for the judgment. If approved, the county’s sales tax will rise 1/3 cent for a 15 year period or until the judgment is paid. Currently, anything purchased in Rogers  County is subject to 1.5 cents in county sales tax.

No organized group has formed to lobby county residents for or against the increase.

However, this week a press release was distributed supporting the sales tax increase.

Kristen Bergman, newly hired Rogers County Public Information officer, sent the release to the media. Bergman, who lives in Tulsa, was recently hired by county commissioners.

The release states “This proposition will enable Rogers County to keep the Material Service Corporation judgment of $27,929,657.12 (as of May 2, 2012) off the property tax rolls. An ad valorem tax levy for the judgment would be a disaster to some homeowners and businesses and would harm the growth of our local economy.

“If the citizens of Rogers County do not vote to increase the 1.5% local sales tax by one-third-cent, then the county will be statutorily obligated to increase property taxes on all home and land owners to pay off the entire debt over a three year period, including 100 percent  of the accrued interest in the first year,” the release said.

This is all a result of Rogers County losing a court battle with Material Services Inc. over the inverse condemnation of a piece of land. A Mayes County jury awarded the company $12.5 million in  2009.  County officials unsuccessfully appealed to the Oklahoma Supreme Court and lost. Material Services was awarded $22 million, plus interest, court costs and lawyers’ fees.

Helm, DeLozier and Thacker decided in March the best course of action to repay the judgement was to ask taxpayers to increase the county’s sales tax by 1/3 cent. Currently, the county’s sales tax is at 1.5 cents. The judgement accrues interest every day until a decision is made to begin repaying it. County Assessor Scott Marsh sees the impact of not passing the sales tax increase. He believes it could be devastating to Rogers County property owners.

“It is my opinion that there is no perfect or even good answer to this problem. All we can do at this point is select the method of payment that is least harmful to the taxpayers of Rogers County,” Marsh said. ‘I find that the methods of the 1/3 cent sales tax increase. If an individual in Rogers County (many of whom may be visitors or tourists) spends $100 at a local retail store, they are only going to pay an additional 33 cents in sales tax that goes toward the judgment.”

Marsh sees how a substantial property tax increase could impact businesses and residents.

“On the other hand, an increase in property taxes of the magnitude previously described could be devastating to senior citizens, small businesses, large businesses trying to expand the work force, prospects of new businesses, families and those who are currently unemployed and trying not to lose their home,” Marsh said.

If the sales tax is not approved by voters on Tuesday, the county will have to increase property taxes over a three year period to meet the court-order obligation. In year one, property taxes would increase much higher because the frst year must include all of the accrued interest of the judgment, according to Marsh.

In year one, property valued at $100,000 would have its taxes increase by an additional $241. Those valued at $200,000 would have taxes go up $482 in additional property taxes. Homes valued at $300,000 would have property taxes rise $723 in additional taxes.

In years two and three, the increase would be less but still $92 in more property taxes for homes valued at $100,000; $184 more for homes valued at $200,000, and $276 more for those valued at $300,000.

 

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