Payne County’s first reduction in its tax base in many years is having a ripple effect on county employees. The county’s elected officers were recently forced to take a $500 per year pay cut because their salaries are calculated using a formula that factors in property tax valuation. A smaller tax base means less pay.
Elected officers went from earning $67,075 to $66,575 per year.
County attorney Lowell Barto determined that they didn’t have to pay back the excess salary they have collected since the fiscal year began on July 1. They’ll take home smaller checks beginning with their pay for October.
Those pay cuts also affect some staff members.
Each elected official has a first deputy who earns up to 90 percent of the official’s salary. Those first deputies will now take home about $450 less per year.
The Payne County Sheriff’s Office has more employees who are being affected because PCSO has its own pay plan that compensates multiple positions at a percentage of the sheriff’s salary.
The tax base isn’t lower because property in the county has lost value.
The number is lower than originally projected because a number of oil companies successfully protested tax assessments that included the value of oil being held in their tank farms near Cushing.
Those adjustments resulted in a tax base that was about $500 million less than originally calculated. That translates into a revenue loss of about $560,000 for the county.
Payne County Assessor James Cowan is pursuing litigation against the oil companies that got their valuations reduced on the claim that their oil is stored temporarily and qualifies for Freeport exemption.
Cowan maintains that the Freeport Exemption is meant to apply to raw materials that are passing through and stored less than 90 days on their way to another location to be manufactured into a product.
The oil companies buy and sell their oil, although it never leaves their tanks, to ensure it doesn’t stay under their ownership for more than 90 days so they can avoid paying taxes on it, Cowan says.
Counties depend on property tax to provide much of their operations funding. In fact, property taxes make up about half of Payne County’s general fund.