Budget & Tax, Economy

Current and former city officials warn SQ 832 could mean higher taxes

May 5, 2026

Ray Carter

State Question 832, which will go before Oklahoma voters in June, would impose a $15 an hour minimum wage and require rapid escalation every year thereafter, putting the wage mandate on a fast track to $35 an hour and higher in future years.

Experts have repeatedly noted that the proposal will reduce the number of jobs available in Oklahoma, restrict worker hours, and force some businesses to close their doors.

But individuals familiar with the operations of Oklahoma’s cities and towns warn that SQ 832 could also indirectly force local tax increases or utility rate hikes to cover the added costs created by the constantly escalating wage mandate.

“In Bixby, we always try to pay a competitive wage, because it was always hard to find employees to begin with,” said state Sen. Brian Guthrie, a Republican who previously served on the Bixby City Council and served as Bixby mayor from 2019 to 2024. “But if you raise the minimum wage on everybody and you force that, that’s all paid from taxpayer funds. This is not a private entity when it’s a municipality. So anytime you do that, you’ve got to make that ground up somewhere, whether that’s through rate increases if they’re employees from the water/sewer/public works, or if it’s coming from the general government side, you’ve got to pay for that somehow. And cities don’t have their own money. They have nothing but taxpayer funds. So you’ve either got to make that up through taxes or rate increases. And as that increases, you either have to cut other services, or you have to raise it from somewhere else.”

Writing in the April 16 edition of The Keystone Gusher, Oilton City Council member Brian Barton similarly warned that SQ 832 could lead to higher taxes in local communities, warning that the perpetual minimum-wage increases mandated by SQ 832 “can quickly become unsustainable for small businesses and small town budgets.”

“Anyone who has ever run a small business understands how this works,” Barton wrote. “When the cost of doing business goes up, prices eventually have to go up too. Government is not immune from that same basic math.”

While many city positions in Oilton already pay $16 to $20 an hour, Barton noted that raising the minimum wage to $15 would then cause the “entire pay ladder” to increase because hourly wages for other positions must increase to keep those jobs attractive.

“Operators, clerks, supervisors, and specialized workers cannot stay at the same pay levels once entry-level wages climb,” Barton wrote. “The ripple effect pushes costs across the entire budget.”

That translates into rising costs for city governments that can quickly outpace current revenue collections. Barton warned that SQ 832 could therefore lead to higher utility bills, higher taxes, or even efforts to increase revenue from traffic tickets and citations.

SQ 832 would mandate continual annual increases in Oklahoma’s minimum wage based on increases in the cost of living in the nation’s largest urban centers, as measured by the U.S. Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers.

Because Oklahoma is one of the nation’s lowest-cost states, the measure would effectively mandate wage levels far above market rates in Oklahoma, based on the cost of living in places like Chicago or Los Angeles.

As a result, while SQ 832 would initially mandate that entry-level jobs pay $15 an hour by 2029, the wage mandate would rapidly escalate in subsequent years with an annual compounding effect. An analysis by The State Chamber of Oklahoma and Oklahoma Farm Bureau found SQ 832 would put Oklahoma’s minimum wage on a fast track to $35.61 per hour and continue rising thereafter.

Ironically, an analysis released by supporters of SQ 832 conceded that the poverty rate would be substantially higher if SQ 832 takes effect than the rate was in 2019, when the minimum wage was $7.25 an hour and had been left unchanged for a decade.

And that estimate may understate the negative impact of SQ 832.

During an October 2025 study conducted by members of the Oklahoma House of Representatives, Peter Hansen, director of research and policy analysis at the National Federation of Independent Business (NFIB), warned that the impact of an artificially high wage law would reduce Oklahoma’s GDP by roughly $700 million by 2035 compared to what would happen if no change were made to the state’s minimum-wage law.

He warned that net job losses were likely in Oklahoma by 2031 and that 16,000 jobs could be lost by 2035 if the state’s minimum-wage law is increased dramatically.

State Sen. Christi Gillespie warns that the loss of those jobs will also create financial challenges for city governments, creating pressure to raise local taxes. While city governments’ direct payroll costs will rise if SQ 832 becomes law, she noted the side effects of SQ 832 could also drive down city revenue.

“Municipalities depend 100 percent on sales tax,” Gillespie said. “We get a little bit of money here and there, but for the majority of the general budget, they depend on sales tax. … If small businesses start going out of business or business revenue goes down, that affects cities and towns.”

Gillespie, a Republican, previously served on the Broken Arrow City Council and was Broken Arrow's vice mayor.

“Businesses are already going out of business, just because rent has skyrocketed and all these things,” Gillespie said. “When you throw in having to pay extra, even if it’s just an extra $1,000 a month for a small business, that can make or break a business. That has a trickle-down effect to the cities, because when businesses start going out of business, they (cities) lose revenue.”