Revenue Losses from Intangible Property Tax Break Could Double
Among the most vocal opponents of State Question 766 were public school officials, which depend on funding from ad valorem taxes. School administrators warned of the measure’s effect on local school funding. The tax exemption went into effect on Jan. 1, 2013, and the revenue impact estimates have more than doubled, the Tulsa World’s Andrea Eger reports:
The Oklahoma Tax Commission initially estimated the new tax break for more than 250 companies centrally assessed by the state, including AT&T, Cox Communications, American Airlines, and various utility and railroad companies, at $50 million. But more recent estimates indicate the actual figure could exceed $100 million.
“We believe the estimate given by the Tax Commission last year when the voters were voting on State Question 766 to be grossly underestimated,” said Steven Crawford, executive director of the Cooperative Council for Oklahoma School Administration. “Corporations got a huge tax break – a $100 million tax break on the backs of children.”
Sixty-five percent of ad valorem revenue goes to common education, and 18-20 percent is earmarked for CareerTech, the World reports. Centrally assessed property figures won’t be reported until the spring, but the funding uncertainty is already impacting Oklahoma schools, according to the paper:
Those tax revenue losses will likely be compounded by declines in other revenue streams, including funds from the school land commission and gross production taxes, as well as decreases in per-pupil state aid because of continuing increases in schools’ weighted average daily membership.
The lost ad valorem revenue could also impact CareerTechs and county governments, the World reports.