The Impact of Property Tax Equalization on Rural Property in Oklahoma

Public opinion surveys indicate that the local each class is less than 35 percent and all property property tax is the least popular of all taxes paid within each class is treated equally. The constiby Americans, yet in almost every state such a tution also establishes a State Board of Equaltax is levied for the support of local government ization "to examine the various county assessand/or public schools [1, p.2]. The major economic ments and to equalize, correct and adjust the argument against the property tax is its ineqsame as between the counties by increasing or uities both vertical and horizontal. Several decreasing the aggregate assessed value of the studies have focused on the vertical equity of property or any class thereof' [6]. However, this property taxes in Oklahoma, [4, 5] but the quesboard has been virtually inoperative since the tion of horizontal equity remains unexplored. 1930's, when a statewide two mill levy was The research reported in this paper deals with dropped. In 1960, the board met and set a target the nature of horizontal inequities in the taxassessment ratio of 20 percent for all property, ation of rural land in Oklahoma and with the but failed to enforce this goal. Since then, impact of state-wide equalization on rural land assessment ratios within each county have been values. established solely by the County Assessor who, as an elected official, generally seeks to reduce OKLAHOMA'S PROPERTY TAX SYSTEM assessment ratios by failing to reappraise property values in accordance with land market In Oklahoma, appraisal and assessment of trends. property values for the purposes of levying ad As a consequence, substantial horizontal invalorem taxes is the responsibility of county equities have developed in the Oklahoma propgovernments. The state collects no millage and erty tax system -both among classes of propexerts a minimum of control over the practices erty within counties (which is sanctioned by state of county assessors. The state's constitution stiplaw) and among counties for any given class of ulates that property must be assessed at no more property.4 As a result of the school funding than 35 percent of its appraisal value.2 Most system, providing amounts of state assistance counties levy maximum millage rates allowed necessary to bring revenue per ADA in each disby law.3 The constitution further provides that trict up to a certain minimum level, taxpayers different classes of property may be assessed in counties with high assessments subsidize taxat different ratios so long as the assessment for payers in counties with lower ones. That is, the