Are You Being Overcharged For OTC Services? PRESENTED BY: ROSS VANDERHAMM, CITY OF EDMOND - DIRECTOR OF FINANCE STAN JONES, CITY OF TULSA - TREASURY MANAGER Background Most cities and towns are charged 1% by the OTC to collect sales and use taxes. Some are charged more. Cities and towns paid over $16M to the OTC for collection of sales and use taxes in FY 2013. Based on work of the accountability group, an arm of the OML liaison board, it was discovered that municipalities are being overcharged for collection costs. The issue has legal implications under Oklahoma’s Constitution and diverts local tax monies to the state. This is also about fairness – about what is right – about cities no longer subsidizing the State’s coffers. HB 1875 HB 1875 arose as a result of joint effort by the OML and OTC. It provides a solution to the problem of overpayment. The bill was sponsored by Rep. McCall (R-Atoka) and Sen. Jolley (R-Edmond). The bill reduces the retention fee charged to cities and towns as well as counties to 0.5%. At the same time, it allowed the Tax Commission to charge the State 0.4% to help offset the loss of funding to the OTC. The bill passed the House intact. It passed in a crippled form from the Senate and was sent to a conference committee to reconcile differences. HB 1875 The conferees failed to come to an agreement in the last legislative session. It is estimated that the failure of the bill will cost cities and towns at least $8.1M in the coming year. The bill remains alive in conference committee. It can be brought up next legislative session without having to go through the entire legislative process. What You Can Do Urge your City Council to pass a resolution supporting the bill. Forward the resolution to your House and Senate members asking for their support when the measure hits the floor. A sample City Council resolution is available on the OML website. Sign the petition prepared by the OML to be sent to legislators urging passage of the bill. What You Can Do Visit with your legislators and inform them that cities and towns are solely dependent on sales tax revenue for general operating purposes. The OML has prepared a spreadsheet listing estimated annual losses to each City stemming from the failure of HB 1875. We ask you to review the spreadsheet so you can relay dollar losses specific to your city or town. These are funds that can go back to your general budget for roads, water, public safety and other important areas. What You Can Do What You Can Do Visit www.oml.org for an update of HB 1875. A copy of the HB 1875 revenue loss spreadsheet, a sample City Council resolution, and the accountability group findings are available on the OML website.