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March 5, 2010

Commissioners, RCIDA modify agreement

Joy Hampton Staff Writer

CLAREMORE — The Rogers County Industrial Development Authority and the Board of County Commissioners reached a consensus on an agreement to amend the current contract between the two entities.

RCIDA fulfilled its promise to the county by releasing use tax revenue that has funded the economic development agency since the inception of the tax. All of that tax will be pledged toward bonds used to fund the Rogers County Courthouse and E911 Center building project.

Despite that all of the use tax funds will be pledged, only $200,000 annually is anticipated to be needed to actually pay the bill. The lion’s share of funding for the courthouse and E911 project will come from a one-sixth (1/6) of a penny extension of county sales tax. That tax previously funded the county jail.

Commissioners have said an additional $200,000 per year will come from the county’s general fund budget. It is hoped that by getting funding and letting out bids now while costs are low, the county may actually come in below projections of the $20 million project total.

RCIDA had hoped to hang on to a recent lump sum payment from January use tax collections in the amount of $249,402. Assistant Director Debi Ward said most of that money is a large lump from a single source and the State Tax Commission sent a letter advising the company has three years to appeal that payment.

Ward had anticipated holding the money back for three years as a precautionary measure, but a similar action taken by the county treasurer on one-cent money paid by Latshaw Drilling was overruled by county commissioners last year.

Commissioners did not see the necessity of holding that money in reserve and voted that the large January payment would be enough to fund RCIDA for the remaining four months of the fiscal year. The $249,402 exceeds the approximately $50,000 per month RCIDA says it needs to stay in business for the remainder of the fiscal year.

Sometime prior to July 1, appropriations for next year will need to be negotiated.

“It’s very complex what we do,” said RCIDA Executive Director Don Cochran. “It’s very expensive sometimes.”

Cochran said though the $800,000 RCIDA currently has in the bank may sound like a lot, economic development can be expensive.

Commissioners said RCIDA could ask for additional appropriations if a need arises prior to July 1.

 RCIDA maintains incubator buildings throughout the county to assist new businesses trying to get started, supports youth program Rogers County Young Entrepreneurs, supports and encourages business and industry through an annual recognition program, helps municipalities with economic development grants, serves as a clearing house entity for school bonds and for the courthouse project bonds, develops industrial parks and, perhaps most importantly, courts business and industry to bring more jobs to the area.

RCIDA reports that Rogers County was the first county to begin collecting use tax due to the efforts of Jim Summerlin and Dwayne Steidley who was a state representative at the time. County use tax went into effect in 1999. A county initiating use tax must already collect sales tax.

“Summerlin approached me,” said Steidley. “Cities had use tax. He came at it from the standpoint that if counties could impose a sales tax they should be able to impose a use tax as well.”

Steidley supported the idea on the house side and he said Sen. Stratton Taylor supported the measure on the senate side. It passed.

Because voters had approved a sales tax, the county commissioners were able to impose a use tax as well. Use tax is collected on items purchased out of state but consumed in state and not previously taxed.

Items are either subject to sales tax or use tax, never both according to OTC officials.

Today, 75 counties collect sales tax and of those, 69 counties also collect use tax. Sales tax is distributed to 505 cities and towns while 366 municipalities collect use tax.

Use tax is more volatile than sales tax, according to OTC officials because a majority of it is not from established local business but relies on items coming in from out of state. Most of those items are related to industry or construction and related to economic development, said Steidley.

RCIDA contributed $40,000 in 2009 to the County Assessor’s Office for the purchase of a new mapping system and also pays 75 percent of the county’s INCOG annual dues. Those dues for 2010 are $22,506 according to a report by RCIDA.

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