Cities and towns in Oklahoma could soon have the authority to increase ad valorem taxes to fund operational expenses like salaries and equipment for public safety. HB 1374, which has made its way through the House and was approved by the Senate General Government Committee April 10, passed the Senate Appropriations Committee with the title stricken on April 12.
Here’s why Oklahoma Farm Bureau members adamantly oppose hB 1374:
Ad valorem taxes FUND Tangible assets.
Ad valorem taxes in Oklahoma are meant to be used for tangible assets like schools, libraries and vocational technology centers. HB 1374 takes the ad valorem tax from those assets and instead uses them for operational expenses and salaries, which has never been done before in Oklahoma.
Ad valorem increases should require a super majority.
Oklahoma law currently requires all other ad valorem increases to receive a super majority, or three-fifths, vote. HB 1374 lowers that threshold, allowing ad valorem taxes to be increased by only a simple majority vote. Requiring only a majority vote creates an uneven playing field for property owners at the ballot box.
Cities and towns have other funding sources.
Cities and towns today operate mainly from sales tax revenue, but have not yet seen the impacts of collecting Internet sales tax. After voter approval, HB 1374 would essentially make increased property taxes a permanent source of municipal funding.
Exemptions aren’t permanent.
Though the measure currently contains an exemption for agriculture land, HB 1374 sets a dangerous precedent for the future. How long until the Legislature decides to remove the exemption? What other entities will line up to receive ad valorem tax funds? HB 1374 is bad policy for rural Oklahoma.
Farmers and ranchers believe in supporting local communities through ad valorem taxes. As the largest land owners in the state, farmers and ranchers take seriously the vital role of funding local schools, libraries, county governments and more. However, the burden of funding city governments cannot fall on landowners.
The bottom line: HB 1374 is a tax increase.
It’s not about local control, but rather about giving cities and towns the ability to fund themselves on the backs of property owners. Tell your state senator to vote NO on HB1374!