Oklahoma Legislature

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• The rejection is a boost for schools.
• Approval could have cut bond capacity.

Oklahoma voters on Tuesday overwhelmingly rejected a constitutional amendment that could have impacted property tax revenue reimbursements public schools and local governments receive from the state to offset tax exemptions for commercial facilities. 

Unofficial state election board results showed 73.75% of the vote was cast against State Question 844, which was placed on the ballot by the Republican-controlled legislature.

The amendment would have empowered legislators to establish reimbursement levels and methodologies for local revenue lost from five-year property tax exemptions used to attract new, expanded, or acquired manufacturing and research and development facilities.

Currently, schools and local governments obtain full reimbursements from an Ad Valorem Reimbursement Fund, which receives 1% of state income tax revenue, and if that falls short, state appropriations. The fund was part of a 1985 constitutional amendment that created the property tax exemption program.
Impact on bonds
Opponents of State Question 844 contended it could adversely affect schools’ bond capacity and per-pupil state funding. Legislative proponents said it would rein in “very expensive” reimbursements and ensure statewide consistency in establishing a property’s valuation during the five-year exemption period.

House Speaker Kyle Hilbert, who sponsored the ballot resolution, said on Wednesday that voters are now “immensely more educated on an expensive program in our constitution that is also very complicated.”

“As future legislatures address potential ballooning costs for the ad valorem reimbursement program, the opposition to this state question was clear: look at qualifications on the front end, not reimbursements to counties after companies qualify,” he said in a statement, adding that certain industries, like future solar farms, should not qualify for the tax exemption.