Legislative leaders back change to uneven reimbursement system
Oklahoma voters will decide Aug. 25 whether to amend the state constitution to end a requirement that the Legislature reimburse local governments — including school districts — for property tax revenue lost when new and expanding manufacturing facilities take advantage of a five-year tax exemption. School leaders in some of the state’s fastest-growing local economies say the change could reduce funding for schools statewide.
State Question 844 would alter the Oklahoma Constitution so the Legislature would no longer be required to backfill towns, counties, and school districts for the revenue they forgo under the state’s long-running property tax exemption for manufacturers. The exemption allows new and expanding manufacturers to pay no property tax on new construction for five years. Under current law, the state reimburses local governments for the lost revenue.
Proponents, including House Speaker Kyle Hilbert and Senate President Pro Tem Lonnie Paxton, said lawmakers need more control over a reimbursement system they argue has become increasingly expensive and uneven, with only a handful of counties receiving the bulk of payments.
Hilbert and Paxton have said the reimbursement system has become increasingly expensive and that its benefits are concentrated in a small number of counties. They argue the Legislature should have discretion to prioritize funding elsewhere.
If approved, State Question 844 would remove the constitutional requirement for reimbursement, giving the Legislature the option to fund it fully, partially, or not at all in any given year.