SQs 758 & 766 Could Hurt Education
Voters will consider two state questions on the November ballot that, if passed, will be very damaging to public education, according to tax experts and the Oklahoma Policy Institute (OPI).
Passage of State Questions 758 and 766 could mean nearly $40 million in cuts to education funding, and local property taxes could increase. The Oklahoma Education Association Board of Directors has taken a position of “vote no” on both measures.
According to OPI, passing SQ 766 will reduce common school funding by $32.5 million. The measure will eliminate the collection of intangible personal property taxes for locally assessed and centrally assessed entities. Currently, only centrally assessed property taxes is being collected.
Centrally assessed property is that which crosses county lines like AT&T, Cox Communications, OG&E, and other utility type companies. Passage of SQ 766 will give tax breaks to these big corporations. Meanwhile, homeowners and farmers will pay higher property taxes as millage rates rise to meet bond obligations as a result of the valuation lost from the exemption gained by those large corporations.
Tax experts believe that if 766 passes, local governments will be forced to raise property taxes and local fees to compensate for the loss of revenue.
The Oklahoma Supreme Court has ruled that most intangible property is taxable, partly because intangible property makes up more than 40 percent of the value of big service and technology-oriented companies. As technology continues to advance, intangible property will comprise the majority of value, eventually making most of the assets for big technology and communication companies not taxable if SQ 766 passes. This will increase taxable items and property taxes for the average Oklahoman.
The Yes on 766 campaign is running ads that claim – incorrectly – “teaching certificates” and other such items will be taxed if the measure fails.
“Those claims are totally false,” said Linda Hampton, OEA president. “The legislature passed a trailer bill last May – SB 1436 – which will prevent the taxing of homeowners and farmers if SQ 766 fails.
“Passing this measure will benefit only large corporations. If SQ 766 is defeated everything will remain as it currently is.”
SQ 758 seeks to cap the growth of property values from 5 to 3 percent. The Oklahoma Tax Commission says passage of this measure will reduce the amount of growth revenue to schools by $6.5 million each year.
“Property values don’t automatically increase every year. I know my property taxes have not increased in recent years,” said Hampton. “Passing SQ 758 doesn’t mean we’ll all pay more taxes. It would deny schools growth money we need so badly.”
Even if SQ 758 were to pass, there is a scenario that would automatically increase property taxes. If a school district is at its bonded indebted maximum, and it relies on growth money to pay off bonds, property taxes would be increased to cover the payment without voter approval.
While there is a fervor at the state capitol to cut taxes, it is often ignored that Oklahoma ranks fourth lowest in the nation in the amount of property taxes paid per person.
Hampton pointed out that Oklahoma schools have already been cut by $300 million over the last three years. During that same time, the state has added 22,000 new students and lost 1,500 teaching positions. Add in new unfunded or underfunded mandates of Common Core State Standards and a new teacher/principal evaluation system, and schools are struggling to make ends meet.
“We are still 49th in teacher pay and 47th in per pupil expenditure in the country, both rankings dead last in our region,” Hampton said. “Our schools simply cannot manage another multi-million dollar loss in revenue. We must vote no on SQ 758 and SQ 766.”
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