Weekly Opinion/Editorial

‘HE TOLD US SO’
by Steve Fair

In November 1996, Oklahoma voters went to the polls to vote on SQ 676. The proposal read in part, “This measure would limit the fair cash value of real property for property tax purposes. The fair cash value would not increase by more than 5% in any taxable year.”

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Oklahoma citizens were told the change would rein in ‘loose cannon’ county assessors across the Sooner state who were assessing taxes with no statutory guidelines or legal restraint. The proposal was supposed to give them a ceiling increase by allowing them to assess a maximum increase in property tax of no more than five(5) percent per year.

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Property tax is an important source of revenue for schools, vo-techs, and county government. Schools get about 60% of the money, Vo-Techs, county and city government get the rest. Property tax are caulated by using four factors- the market value of the property, an ‘assessment ratio’(currently 11%), less homestead exemption and applying the county millage (tax rate per $1000). Because property tax assessment wasn’t widely understood by the average Oklahoman, any proposal to rein in their increase was met with approval.

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The late Jack Edens was a popular radio talk show host at KTOK in Oklahoma City. Knowledgeable in fiscal issues, Edens passionately railed against the proposal, stating it was "full of fishhooks" and would be interpreted that property tax increases of 5% annually be ‘mandated.’ Edens was dismissed by most people as being an alarmist. A month after he gave an impassioned plea at the Republican 4th District Convention at Duncan’s Simmons Center, Edens died of a heart attack. Edens’ warning was ignored and Oklahoma voter passed the measure in November 1996 and amended the state constitution. 808,429 voters supported the initiative, and 290,433 voters opposed. Edens was right on target and the measure had ‘unintended consequences.’ In some parts of the state, property taxes have more than doubled in 14 years.
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In Oklahoma’s two largest counties, property taxes are up over 35% in just five years. "This (property tax) is the fastest-growing tax in the state," said State Representative Russ Roach, (D- Tulsa). Roach said the law is intended to allow growth counties to raise property taxes up to 5 percent a year instead of a mandated 5 percent. "What was intended to be a tax increase ceiling has instead become an annual tax increase floor," Roach said. In July, Roach asked the Attorney General for an opinion on Article 10- section 8B of the State Constitution(SQ 676).

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In response to the request, an opinion was released in September by Attorney General Drew Edmondson which said, “the assessor must increase the assessed fair cash value by 5 percent each year until it is within 5 percent of the actual fair cash value." In other words, the only way this boondongle can be changed is by amending the constitution to avoid almost routine property tax increases every year.

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"It is clear to me that the AG's opinion says the citizens will have to change the law if they want relief from what has become an almost automatic 5 percent increase in property taxes each year," Roach said.

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Last session, State Senator Jim Reynolds, (R-Moore) authored SJR 5 which would have let Oklahomans vote to lower the current property tax cap of five percent to three percent. SJR 5 passed the Senate and moved to the House where it stalled and was not voted on.

“House Speaker Chris Benge, (R-Tulsa) must be credited with effectively killing the bill. In doing this he’s denied seniors and hard-working Oklahomans the opportunity to voice their opinion on ever increasing property taxes. The intention was to keep the annual property tax increases under that cap, but instead, numerous county assessors have raised property taxes the maximum five percent each year,” Reynolds said. "Property tax relief is due for Oklahomans," Reynolds said. "It affects everybody, senior citizens, baby boomers and newlyweds."

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State Representative Jason Murphey, (R-Guthrie) has proposed legislation that places a temporary freeze on property tax assessments. This freeze would take place over a two year time period after which time the cap on new assessments could never be higher than 2.5% and could be as low as 0%. Murphey has also announced he will introduce a bill increasing the amount allowed for homestead exemption. It has been more than twenty years since any adjustment has been made to homestead.

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Its clear Oklahoma voters should be given the chance to fix the ‘unintended consequences’ of SQ 676. The lack of courage by House Republican leadership in not getting this issue voted on before the end of session is disappointing. Granted, budget shortfalls and tax revenue shortages make it a difficult time to deal with this issue, but it’s the right thing to do and will send a message that Republicans don’t avoid the tough issues- even in tough times.
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Jack Edens didn’t live long enough to get to say, “I told you so,” about the effects of SQ 676, but his example of looking out for the citizens of Oklahoma should be followed by elected officials on both sides of the aisle.