2011 Property Tax Reform Proposals

Without a doubt, the issue about which I receive the most passionate constituent feedback is the demand for property tax reform.

We have now reached the first deadline in the legislative session and I am happy to report that there are a series of property tax reforms proposals which have been approved in committee and are still viable for legislative approval during this session.

Last week, I was honored to present House Bill 1293 to the House Revenue and Tax Committee on behalf of the bill’s author State Representative David Derby who could not be present at the hearing.

House Bill 1293 significantly increases the income eligibility ceiling for those who can claim double-homestead exemption and indexes the income ceiling to the rate of inflation. The legislation also increases the upper income eligibility limit for those who are eligible to claim part of their property tax as a refund on their state income tax and indexes that limit to the rate of inflation.

I was excited to have the opportunity to present the bill before the Rev and Tax committee because I had just received a call from a constituent who will be experiencing a property tax increase because her income went up slightly making her ineligible for the double-homestead exemption. This income limit should have been indexed to inflation in the first place as the limit is prohibitive even to those on a small fixed income who can lose the exemption with just a minor cost of living increase that keeps up with inflation.

House Bill 1293 was approved by a unanimous vote of the Revenue and Taxation committee. Representative Derby also won approval for House Bill 1293 from the Appropriations and Budget Committee and it now goes to the House floor for consideration by the entire House of Representatives.

Two other property tax reform proposals, House Joint Resolution 1001 and House Joint Resolution 1003 have won approval from the House Rules Committee and are also now ready to be heard by the House.

House Joint Resolution 1001 would allow the people of Oklahoma to vote on changing the state Constitution to remove the income limits on the ability of those over the age of 65 to freeze their property taxes at their current levels. The proposal is designed to aid those who are on a fixed income and are at risk of being priced out of the houses which they have spent much of their lifetime working to pay off. This is an all to common dilemma faces by seniors who are already trying to cope with the increase in health care costs and inflation.

An especially unfair aspect of the current senior freeze limit is that fact it applies to gross and not net income. This punishes small businessmen and farmers who must count gross income which they may not have realized a very large profit margin on. For instance, a farmer who sells cattle would have to count the entire sell price of the cattle even if he took a loss on the sale.

House Joint Resolution 1002 is by far the most important property tax reform proposal of the three mentioned in this article. This resolution purports to ask the people of Oklahoma to change the state Constitution to limit the increase of billable property taxes to no more than 3% each year or the rate of inflation whichever is less. The means that even if the County Assessor increases the assessment of a property beyond 3% each year that not more than a 3% increase or the rate of inflation can be charged to the home owner.

In order to stay alive, all of these proposals will need to be approved by the House by the next legislative deadline which will occur in two weeks time.