State Question 844 asks voters to move school tax reimbursement guarantee from Constitution to Legislature

Oklahoma voters will decide State Question 844 on Aug. 25, a constitutional amendment that would change how the state reimburses schools, counties and other local governments for property tax revenue lost because of Oklahoma’s five-year manufacturing ad valorem tax exemption.

Article X, Section 6B of the Oklahoma Constitution exempts qualifying new or expanding manufacturing facilities from ad valorem taxation for five years. The section, as amended, requires the Legislature to reimburse common schools, county governments, cities and towns, emergency medical services districts, vocational-technical schools, junior colleges, county health departments and libraries for revenue lost because of that exemption.

State Question 844 would amend Article X, Section 6B by removing the constitutional requirement that the Legislature reimburse those taxing entities and instead require the Legislature to establish reimbursement levels and methodologies by statute. The measure would also change how the assessed value of exempt manufacturing property is counted when calculating the constitutional debt limits of school districts and other political subdivisions by tying that calculation to the applicable reimbursement level.

The Legislature referred the measure to voters through House Joint Resolution 1087, authored by House Speaker Kyle Hilbert, R-Bristow, and Senate President Pro Tem Lonnie Paxton, R-Tuttle. The House approved the resolution in March, and the Senate passed it 38-7 on April 9.

The state paid approximately $93 million in manufacturing exemption reimbursements in tax year 2024, according to the Oklahoma Tax Commission. Annual reimbursements reached a high of approximately $161 million in tax year 2019.

Paxton described the manufacturing exemption reimbursements as “very, very expensive” and said the proposal would give the Legislature greater control over reimbursement decisions. Sen. Mary Boren, D-Norman, voted against the resolution, saying she could not make the numbers work. Dewey County Assessor Jennifer McCormick, an officer of the County Assessor Association of Oklahoma, said reimbursements are funded in part through state income tax collections, which lawmakers have also sought to reduce.

The amendment does not itself reduce reimbursement funding. If voters approve it, future reimbursement levels would be determined by future Legislatures rather than by the current constitutional requirement. Article X, Section 6B applies statewide to local taxing entities subject to the reimbursement requirement. Reimbursement payments are made only when a taxing jurisdiction loses ad valorem revenue because of qualifying exempt manufacturing property.

State Question 844 will appear on the Aug. 25 primary runoff election ballot alongside State Question 846.