Yes on SQ 844: Give Legislature flexibility on reimbursements to local governments for property tax exemptions

Xpda, CC BY-SA 4.0

When a statutory matter gets written into the State Constitution, amending it is a pain in the ballot. On August 25, 2026, at the runoff primary election (also the City of Tulsa general election), Oklahoma voters will decide State Question 844, which would change some clauses in Article X, Section 6B of the Oklahoma Constitution. The Constitution grants a five-year property tax exemption for new or expanded manufacturing facilities and mandates the State to reimburse local government for the property tax revenue they would otherwise receive. If SQ 844 passes, the Legislature would decide how much to reimburse and how to divide the reimbursement up among taxing entities. Here is the gist of SQ844 that will appear on the August 25 ballot:

This measure amends article 10, section 6B of the Oklahoma Constitution. Section 6B incentivizes manufacturers to locate, expand, or acquire manufacturing facilities in Oklahoma through an ad valorem taxation exemption for five (5) years. Currently, the State must reimburse common schools, county governments, cities and towns, emergency medical services districts, vocational technical schools, junior colleges, county health departments and libraries for revenues lost as a result of each exemption provided. This measure authorizes the Legislature to enact laws establishing the levels and methodologies of reimbursement for the previously mentioned local governmental entities resulting from the manufacturing exemption. The laws are meant to ensure that no individual county receives reimbursement in an amount detrimental to other Oklahoma counties. The levels and methodologies will replace the current statutory framework for reimbursement. For the purpose of calculating the limit on indebtedness for political subdivisions, the measure requires such amount be equal to the amount of reimbursement applicable to such property under laws enacted by the Legislature. This measure will have a fiscal impact on the state that will depend on the application of the levels and methodologies adopted by the Legislature.

Here is what will actually change in Oklahoma Constitution Article X, Section 6B, Paragraphs E & F:

E. The For the purpose of ensuring that no individual county shall receive reimbursement in amounts that result in a detriment to the other counties of the state, the Legislature shall enact laws to carry out the provisions of this section and to provide for the levels and methodologies of reimbursement to common schools, county governments, cities and towns, emergency medical services districts, vocational-technical schools, junior colleges, county health departments and libraries for revenues lost to such entities as a result of the each exemption provided by this section. F. The assessed valuation of property exempt from taxation by virtue of this section shall be added to the assessed valuation of taxable property in computing the limit on indebtedness of political subdivisions contained in Section 26 of this article, in an amount equal to the level of reimbursement applicable to such property under the laws enacted by the Legislature.

There will be no change to paragraphs A through D, which establish the exemption and eligibility, and paragraph G, which establishes a county option to apportion up to 25% of the county 10-mill property tax on previously exempt manufacturing facilities to economic development. Proponents in the Legislature want the flexibility to ensure that reimbursements are not as concentrated to particular counties and that they can be scaled to avoid harming the rest of the state budget. Opponents, mainly from the Left, want to see the school districts where these manufacturing facilities are located continue to get the reimbursements they currently enjoy, and they point out that these reimbursements reduce the amount of money they receive in the state school funding formula. Reimbursements are funded by an earmarked 1% of state income tax collections, but that hasn't been enough to cover the required amount, and the Legislature has had to appropriate additional funds. From FY 2019 through FY 2024, that 1% only covered 30.5% of the reimbursements. I'd love to see these exemptions go away entirely, along with other taxpayer-funded inducements to private business, but that option isn't on the ballot. For now, Oklahomans need to vote yes to give the Legislature the flexibility to balance the various interests involved without overburdening the taxpayers. According to the 2026 annual report from the Oklahoma Tax Commission's Ad Valorem Division, 2026 reimbursements for tax year 2025 total $88,635,421, a significant drop from the 2019 tax year peak of $161 million. The 2024 quinquennial analysis of the exemption by the Oklahoma Incentive Evaluation Commission notes that the legislature removed wind farms from the exemption list in 2015, effective for the 2018 tax year, and the previously granted exemptions have been expiring since then. $35.6 million (40%) of this year's $88.6 million reimbursement went to Mayes County. Nearly all of that amount, $34,187,160, is for the exemption to Google LLC - Myall LLC for the data center complex at the Mid-America Industrial Park. That's 38.6% of the statewide total. (A simple way to reduce the number of data centers being proposed for Oklahoma would be for the Legislature to remove data centers from the list of exempt industries, just as wind power generation was removed in 2015. This could also be accomplished by an initiative petition to amend 68 O.S. 2902, the section of law that defines which types of businesses are eligible for the exemption.) Tulsa County is the only other county into 8 digits in reimbursements, receiving $16,949,307 for the 2025 tax year. Holly Sinclair (east & west refineries combined) receives the largest benefit at $3.4 million, followed by Kimberly Clark ($2.1 million), Amazon ($1.7 million), Macy's Corporate Services ($1.7 million), Whirlpool Corporation ($1.6 million), Green Bay Packaging ($1.3 million), and AAON Corp ($1.1 million). The remaining exemptions are mainly in five figures. School districts are the largest recipients of property taxes and are also receiving the bulk of these reimbursements, money they likely would not have received in the absence of the ad valorem tax exemption and other incentives for these industrial developments. The complaints that reimbursements are unfairly concentrated in a few school districts remind me of complaints in the 1970s about districts where large electric power plants were located. On our way to visit my grandparents in Nowata, we would pass the new and growing Oologah Schools complex. Mom (a teacher at Catoosa) would remark on Oologah's new indoor pool and higher teacher salaries, funded by the coal-fired PSO generating plant in the district southeast of the town. At some point, the Legislature changed the law so that public utilities are subject to a higher assessment rate and pay their ad valorem taxes to the state rather than the county, spreading the revenues from regulated public utilities across the state. Whether these exemptions are funding real job growth or just enable financial gamesmanship is hard to tell. The Macy's distribution center in Tulsa's Cherokee Industrial Park, one of the top beneficiaries, closed this past spring. Why are property tax exemptions a constitutional matter at all? After the jump, we'll take a look at the history of Article X, Section 6B.
- August 1, 2026 at 09:54PM
Yes on SQ 844: Give Legislature flexibility on reimbursements to local governments for property tax exemptions
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