{"id":34741,"date":"2022-04-14T05:30:27","date_gmt":"2022-04-14T10:30:27","guid":{"rendered":"https:\/\/stateimpact.npr.org\/oklahoma\/?p=34741"},"modified":"2022-04-13T14:58:42","modified_gmt":"2022-04-13T19:58:42","slug":"how-property-tax-protests-are-hurting-oklahoma-schools","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2022\/04\/14\/how-property-tax-protests-are-hurting-oklahoma-schools\/","title":{"rendered":"How property tax protests are hurting Oklahoma schools"},"content":{"rendered":"

It\u2019s at least an $80 million problem.<\/span><\/p>

That\u2019s how much money a late-2021 estimate says is sitting in escrow as bigtime property owners in rural Oklahoma protest their assessed value \u2014 and therefore their ad valorem tax bill.<\/span><\/p>

It\u2019s a complicated issue, and it has to do with tax payments and land and energy equipment assessments. But the bottom line is the issue is hurting the state\u2019s schools because they rely on locally based ad valorem taxes for their budgets.\u00a0<\/span><\/p>

So, StateImpact is breaking down these issues by answering some questions you might have about ad valorem tax protests.<\/span><\/p>\n

\"\"<\/p>\n

Mandy Snyder, Noble County Assessor<\/p>\n<\/div>\n

What are ad valorem taxes?<\/b><\/h3>

Ad valorem<\/span><\/a> is a Latin phrase that means \u201caccording to value,\u201d Mandy Snyder, Noble County Assessor said.\u00a0<\/span><\/p>

Snyder\u2019s job \u2014 like that of every one of Oklahoma\u2019s 77 county assessors \u2014 is to determine the value of property to see how much it should be taxed. They do this by looking at sales records, the values of similar properties and possible depreciation or appreciation of assets.<\/span><\/p>

Different counties have different percentages, but essentially a portion of the value of the property is paid in taxes to the county to fund various local government services.\u00a0<\/span><\/p>

The county assessor will notify how much money is owed to the county, and the taxpayer pays the bill they receive.<\/span><\/p>\n

What do revenues from ad valorem taxes pay for?<\/b><\/h3>

Take a look at your ad valorem bill and most of the money you pay will be for public school districts.<\/span><\/p>

There are other services a county takes money out for, and they\u2019re all laid out in this <\/span>handy fact sheet<\/span><\/a> from Oklahoma State University.<\/span><\/p>

But ad valorem taxes are particularly important in school districts. For example, the money that was paid in property taxes by local wind farms has financed a new high school in Minco, superintendent Kevin Sims said.<\/span><\/p>

\u201cWithout the wind towers, we wouldn’t have this, I promise you,\u201d Sims said about the building that was completed in 2015.\u00a0<\/span><\/p>

But it\u2019s not like that money just pays for the building itself.\u00a0<\/span><\/p>

Minco voters first had to pass a bond issue, which the school district sold to bondholders. The revenues from local property taxes then are used to pay back those bondholders for the money they fronted for the new high school.<\/span><\/p>\n

\"\"<\/p>\n

Robby Korth \/ StateImpact Oklahoma<\/p>\n

Wind towers in Noble County.<\/p>\n<\/div>\n

Why is money held up in protest?<\/b><\/h3>

Any property owner can disagree with what the county assessor says their property is valued at.<\/span><\/p>

The vast majority of property owners don\u2019t protest and simply just pay their bill and move on,\u00a0<\/span>Snyder said.\u00a0<\/span><\/p>

But bigtime property owners \u2014 primarily wind farms and oil and gas companies \u2014 have been protesting their valuation to try to get a lower bill.<\/span><\/p>

The companies, Snyder said, pay what they believe they owe, plus the difference between their valuation and the county assessor\u2019s. The unprotested amount goes to the local government. But the difference between the two figures goes into escrow \u2014 essentially, it\u2019s frozen in an account untouched by either party. The companies protesting can get the interest from the money being protested.<\/span><\/p>

Snyder said both sides will work to settle, but sometimes that can\u2019t happen, and it moves to local court where it often languishes behind more pressing matters.<\/span><\/p>

\u201cThe ad valorem cases tend to not hold as much weight,\u201d Snyder said. \u201cThey get pushed down and pushed down. And that’s some of the reason it’s just dragged on and on.\u201d<\/span><\/p>

Snyder said four cases have taken multiple years to litigate in Noble County.\u00a0<\/span><\/p>\n

What does that mean for schools?<\/b><\/h3>

The escrow money will appear on a school district\u2019s balance sheet as money they\u2019re owed from local property taxes, said Shawn Hime, Executive Director of the Oklahoma State School Boards Association.\u00a0<\/span><\/p>

\u201cOnce it’s protested and that is pulled out of their local money and held in escrow, it affects the local school district because they are not receiving money that is due to them,\u201d Hime said.<\/span><\/p>

Missing out on that kind of money is a problem for the state\u2019s <\/span>chronically underfunded schools<\/span><\/a>.\u00a0<\/span><\/p>

\u201cA protest is very challenging to a school district and the patrons that live in that school district,\u201d Sims of Minco said.<\/span><\/p>

But it can also have an implication on every other school district in Oklahoma, Hime said.<\/span><\/p>

If a school doesn\u2019t get enough property tax money \u2014 and most simply don\u2019t \u2014 they get state aid to make up for it.<\/span><\/p>

\u201cThe whole pot of money statewide goes down, so everybody in the state loses the same amount of dollars per student,\u201d Hime said.<\/span><\/p>\n

\"\"<\/p>\n

Jackie Fortier \/ StateImpact Oklahoma<\/p>\n

Oklahoma State Capitol<\/p>\n<\/div>\n

What is the Oklahoma legislature doing about the problem?<\/b><\/h3>

There were a flurry of bills introduced this session in the wake of an <\/span>interim study<\/span><\/a> led by rural Republicans last fall.<\/span><\/p>

These measures have passed off the House floor and through senate committees with their titles off, meaning each is alive but subject to change. They include:<\/span><\/p>\n