I. How the Tax Break Works Today
In 1985, Oklahoma voters amended our state Constitution to create a new tool for attracting businesses and jobs. The idea was straightforward: if a qualifying manufacturer were to build a facility here in Oklahoma, they would receive a five-year exemption from property taxes on that new investment.
The 1985 amendment required the state to reimburse local entities for the tax revenue they would have otherwise received.
In short, build your manufacturing plant in Oklahoma, and pay no property tax for five years.
Those property taxes—sometimes called ad valorem taxes—do not flow to the state. They stay in the local community, helping fund schools, career techs, libraries, health departments, and other local services. In other words, property taxes are a major part of how local communities pay their bills. And that is exactly why the 1985 plan came with a second part.
Because the state—not the local community—offered the tax exemption, the 1985 amendment required the state to reimburse local entities for the property tax revenue they would have otherwise received.
That reimbursement can be especially important for growing communities because growth often brings new costs. For example, a large manufacturer might bring hundreds of new families, more students, heavier road use, and new infrastructure needs—all while the company itself pays no property taxes for five years.
The 1985 amendment sought to balance two goals: encouraging businesses to invest and build in Oklahoma by offering a tax break, while ensuring local communities had the financial resources to meet growing infrastructure demands.
II. Why the Push for Change?
The primary force driving efforts to alter the current system is, much like in 1985, straightforward: money—or, more precisely, the lack of it.
Following the 1985 amendment, the State Legislature created a reimbursement fund financed by 1% of all individual state income tax collections. The problem is that the fund can no longer cover what is owed to local communities. In 2025, the state paid about $93 million in manufacturing reimbursements, even though the dedicated revenue flowing into the reimbursement fund was only about $50 million.
Simply put, the 1985 program is currently costing the state more than the reimbursement fund collects. Beyond that basic fact, however, supporters and opponents of State Question 844 disagree on both the cause of the shortfall and how it should be addressed.
III. SQ 844: The Proposed Change
State Question 844 proposes to change part of the 1985 manufacturing tax break system.
The five-year property tax exemption for qualifying manufacturers would remain in place. What would change is how local communities are reimbursed for the property tax revenue they would otherwise receive.
Because the proposed change is an amendment to the state Constitution, Oklahomans must decide whether to approve or reject the change on August 25, 2026, by voting YES or NO on State Question 844.
What would change is how local communities are reimbursed for the property tax revenue they would otherwise receive.
IV. Arguments For and Against the Change
What Supporters are Saying...
Imagine, for a second, that you are a homeowner whose house has been overvalued. If the county assessor says your $200,000 home is worth $500,000—even though you could never sell it for that—you would have a strong incentive to challenge it because you would be on the hook for an artificially high tax bill. Oklahoma law gives property owners a process to do just that.
Supporters argue that the current tax program can leave Oklahomans overpaying on the front end and local communities scrambling for additional funding on the back end.
But supporters of State Question 844 argue the manufacturing exemption turns that normal incentive on its head. For the first five years, the manufacturer does not pay the property tax—the state reimburses the local community based on the county’s own valuation.
Supporters argue that local officials have a disproportionate amount of influence over that valuation process, which ultimately determines how much state taxpayers must reimburse. While the Oklahoma Tax Commission reviews the process with some input, the Legislature itself has no direct role in deciding the amount it must eventually fund.
The problem can become especially evident in year six, when the exemption ends. The manufacturer must finally pay its property tax. The company may then challenge a valuation it believes is too high—and if that valuation is reduced, the damage has already been done.
Oklahoma taxpayers would have spent five years paying for an inflated value, while the local community may have built budgets, issued bonds, and grown dependent on revenue tied to that same higher number. Supporters argue that the result can leave Oklahoma taxpayers overpaying on the front end and local communities scrambling on the back end.
This, supporters argue, creates a basic accountability problem: the local community helps set the value and receives the reimbursement, while the state pays the bill with little control over the process used to calculate it. State Question 844, they argue, would give the State Legislature the authority to establish a more consistent statewide process for determining reimbursement levels.
What Opponents are Saying...
Opponents of State Question 844 argue the current system is working exactly as voters intended in 1985. Because the state grants manufacturers the five-year property tax exemption—not the local communities—it is only fair that the state cover the cost. Schools, libraries, and other local entities never chose to give up that revenue, opponents say, and thus should not be forced to absorb the loss simply because the program has become more expensive.
They also point out that the State Legislature already has significant control over which facilities qualify for the exemption. If lawmakers believe the program has become too expensive, opponents argue they can tighten statutory eligibility requirements rather than reduce reimbursements to local communities. Or, even more directly, Oklahoma could do away with the program altogether, giving local communities the authority to grant property tax exemptions.
Opponents also contend that concerns about inflated property valuations can be addressed without giving the Legislature broad control over reimbursement levels. Rather than taking authority away from local communities, they say the state could create a simple process for challenging valuations it believes are too high, or just require an independent review. That would allow the state to contest questionable assessments without simply deciding how much of the local reimbursement it is willing to pay.
Opponents may agree that some reform is needed, but they refuse to accept that ceding broad control of tax reimbursements to the State Legislature is the right move.
The biggest concern of many opponents, however, is what could happen in the future. State Question 844 would give lawmakers substantial control over reimbursement levels, and opponents argue there is no guarantee future Legislatures will maintain current payments when budgets get tight. In their view, the state should not be able to mandate the incentive and then later shift part of the bill onto schools, counties, and other local governments that had no say in granting the incentive.
In essence, opponents may agree that some reform is needed, but they refuse to accept that ceding broad control of all property tax reimbursements to the State Legislature is the right move. Therefore, they are a “No” on State Question 844.
V. The Question Before Voters
State Question 844 is about who should have more control over the reimbursement process of Oklahoma’s manufacturing tax incentive: the state that pays the reimbursements or the local communities that depend on them. Voters will decide which approach they prefer on August 25.