Oklahoma ballot measures threaten school property taxes
Oklahoma Legislature
Oklahoma public school districts face threats to their property tax revenue from a potential trio of ballot measures this year, including one that could have consequences for bonds.
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Voters will decide Tuesday the fate of State Question 844, a proposed constitutional amendment placed on the ballot by the legislature that would give lawmakers the ability to determine how much schools and local governments are reimbursed by the state to make up for revenue they lose from property tax exemptions used to entice manufacturing and research and development facilities.
Dr. Shawn Hime, executive director of the Oklahoma State School Boards Association, said the ballot measure does not address the actual exemptions granted to commercial facilities, but does remove a reimbursement guarantee from the state constitution by allowing any future legislature to determine how much, if any, schools are able to recoup, potentially affecting bond capacity.
“If somehow the reimbursement goes down, this would then cause the bonding capacity to go down, and those citizens would have to pay the difference,” he said. “They wouldn’t receive that from the state as a reimbursement, so their local citizens’ portion of the taxes would go up.”
Another proposed amendment that will appear on the Nov. 3 ballot seeks tighter caps on annual property assessment growth, while the Oklahoma Supreme Court is weighing the constitutionality of another measure for the fall election that would phase out homestead property taxes.
This week’s Question 844 would authorize the legislature “to enact laws establishing the levels and methodologies of reimbursement,”
It’s part of an election slate Tuesday that includes primary runoff elections in the Republican race for governor and the Democratic race for U.S. Senate.
In 1985, voters passed a constitutional amendment that created a five-year property tax exemption for new manufacturers coming to Oklahoma, according to
Fund falls short
Because the fund has not had sufficient money to fully replace revenue since 2002, the legislature stepped in to fill the gap, according to the Oklahoma Policy Institute. A general appropriations bill
Per-pupil state funding could also decrease if lower reimbursements force some districts currently not qualified for state aid due to their local revenue levels to become qualified,
“Since the Legislature appropriates one pool of money for the state aid formula, adding more districts to that pool means the available funding would be divided among more districts and more students,” it said.
The Oklahoma Policy Institute
“Voters are being asked to give this authority now and trust that lawmakers will make the right decisions later,” the group said.
In an Aug. 12
“Property owners who reside in school districts who issued bonds based on the assessed values during those first five years, can find themselves in a predicament if the assessment was not done properly,” he wrote. “When the valuations are later reduced, those property owners can face difficult financial adjustments because the tax base no longer matches what was originally projected and what is now legally obligated to be paid to bondholders.”
Ahead of an April Senate vote
“This simply puts a little bit of that control back in us as a legislature to determine how much that ad valorem reimbursement could be,” he said, adding it would result in a more-affordable process for the state, while affected local governments and schools will receive a tax revenue “windfall” when the five-year exemptions expire.
State government is flush
Earlier this month, Gov.
Oklahoma’s considerable reserves and fund balances helped earn
A proposed constitutional amendment – State Question 847 – lawmakers put on the Nov. 3 ballot asks
Annual revenue loss estimates for school and county operations by the Oklahoma Policy Institute range from an initial $42 million to $575 million in 10 years. Oklahoma cities cannot levy property taxes for operations, but can obtain voter approval for property tax-backed GO bonds.
Another measure that may appear on the November ballot is the subject of a court battle. The
Opponents told the
They contend the measure violates multiple provisions of the Oklahoma Constitution, including uniformity.
The exemptions would not apply to property taxes levied to pay off existing bonds, according to a court filing by the measure’s proponents.
