Oklahoma Considers Eliminating Property Taxes in Tax Reform Push

Oklahoma City, OK-Property Taxes in the Crosshairs of Statewide Reform

As the legislature advances plans to eliminate the Oklahoma income tax, lawmakers are also exploring the possibility of abolishing property taxes. Proponents argue that reducing or eliminating property taxes would further relieve Oklahomans from financial burdens and make the state more competitive.

However, county officials are sounding the alarm, warning that property taxes fund critical local services like schools, public safety, and infrastructure. Some projections show that eliminating property tax could erase up to 20% of local government revenue, creating an immediate funding crisis.

The Case for Elimination—State Perspective

Supporters of the move argue:

• Economic Relief: Removing property tax could ease the financial strain on homeowners and lower living costs.

• Attracting Business and Talent: Lower tax burdens could attract new business, retirees, and remote workers.

• Simplification: Consolidating tax systems could streamline state and local government operations.

  
  

What Would Disappear Without Property Tax Revenue?

Local governments, school districts, and public services rely heavily on property taxes. Here’s what could change if they were eliminated:

• Education: School districts could lose critical funding for teacher salaries, textbooks, and extracurricular programs.

• Public Safety: Police, fire departments, and emergency response units could face layoffs or reduced coverage areas.

• Infrastructure Maintenance: Roads, public buildings, libraries, and parks would likely suffer from deferred maintenance and reduced services.

• Local Autonomy: Communities could be forced to seek more overhead-heavy or regressive revenue sources, such as local sales taxes.

  
  

  Studying the Consequences—What’s Next

An interim legislative study has been commissioned to explore the feasibility and effects of property tax elimination. Lawmakers say they want a transparent, data-driven approach before committing to policy changes.

The study will likely examine:

• Short-term and long-term fiscal impacts on state and local budgets

• Options to offset revenue loss, such as sales or excise tax adjustments

• Transitional funding mechanisms for local governments

• Historical examples or models from other states

At a Glance — What’s at Stake

Stakeholder	Concern / Interest
Homeowners	Lower taxes but risk loss of community services
Schools	Funding cuts may impact student programs
Local Governments	Budget shortfalls could reduce critical services
Policymakers	Need a sustainable replacement for property tax
State Budget	Must offset local revenue loss effectively

Summary: The proposal to eliminate Oklahoma property tax is gaining traction in the legislature, but without clear solutions to replace lost revenue, communities, schools, and essential services could pay a steep price. The interim study aims to shed light on viable paths forward as the state considers a broader tax reform agenda