Budget & Tax

Curtis Shelton | April 2, 2019

New Tax Foundation property tax map

Curtis Shelton

The Tax Foundation recently released its new tax map of per capita property tax collections for each state. Property taxes often make up the majority of local tax collections and are a primary source for school and transportation funding.

The national average per capita collection from property taxes was $1,556 in fiscal year 2016. At $699, Oklahoma’s per capita collections were more than $850 lower than the national average. This places Oklahoma 49 out of the 50 states in property tax collections.

On a regional basis, Oklahoma is $419 below the regional average of $1,118. Texas, which has no income tax and relies heavily on local property taxes to fund schools, takes the top spot with $1,762 in per capita collections. The chart below shows how much the rest of the states in the region collect from property taxes and where that ranks nationally.

StatePer Capita Property Tax CollectionsNational Rank
New Mexico$76847

Not only does Oklahoma have a relatively low property tax burden, but much of the revenue is limited in what it can be used for. Currently, most local property tax dollars for schools are used to make bond payments or are deposited in the school building fund, which is restricted to things like buildings and furniture. The funding that can go for operations counts against schools in the state funding formula, which creates a disincentive for districts to rely on local funding. This is one of the main drivers in the difference between education funding in Texas and Oklahoma.

While freeing current education property tax dollars from artificial funding silos could benefit the state, Oklahomans should also consider reforming our state’s tax structure. Property taxes are one of the most stable revenue sources. More stable revenues help policymakers craft more responsible budgets and make it more likely those budgets remain balanced. And local property tax rates can be put under the control of local voters, creating true local control and local accountability.

When a state like Oklahoma has extremely low property tax collections, it must rely more on volatile revenue sources like severance taxes. These types of taxes are susceptible to major shifts as we’ve experienced recently in Oklahoma with the statewide recession in 2015 through 2016 and the current economic boom the state is enjoying. It can also cause a state to raise revenue through more harmful taxes to economic growth like the income tax.

Curtis Shelton Policy Research Fellow

Curtis Shelton

Policy Research Fellow

Curtis Shelton currently serves as a policy research fellow for OCPA with a focus on fiscal policy. Curtis graduated Oklahoma State University in 2016 with a Bachelors of Arts in Finance. Previously, he served as a summer intern at OCPA and spent time as a staff accountant for Sutherland Global Services.

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