Further Reflection on State Question 766

A response to an anonymous comment:

State Question 766 would apply to human beings. Florida's intangible tax put an annual assessment on the value of pensions and retirement benefits, until voters there repealed the state's intangible tax. A tax on intangible property is much bigger than just corporations. 

State Question 766 applies to human beings if you believe that corporations are people, my friend.

Florida had an intangible tax, repealed in 2006, that was a tax on stocks, bonds, etc. (pensions and other retirement benefits were exempted, though mutual funds weren't). Oklahoma has long had an exemption from intangible taxation from these types of personal assets, so there would be no change to the tax burden payed by people with mutual funds, for example. The Oklahoma intangible tax as currently structured only affects assets owned by businesses, and up until the 2009 decision by the Oklahoma Supreme Court, it only affected businesses whose value was assessed centrally by a state board, rather than locally by county assessors.

A centrally-assessed company (a public utility usually) pays taxes based on the value of the company as a whole. Southwestern Bell assessed the value of all their property, buildings, equipment, etc. (tangible property), and saw that the value of their company was greater than the value of their tangible property. They argued that they should be able to deduct the difference and only pay taxes on the tangible property. A judge disagreed, saying only things on the list of exempt intangible things can be exempt.

Locally-assessed companies saw this decision and realized that the exemption from ad-valorem taxation they had been enjoying for years was not actually codified in law, and there was nothing to stop property assessors from assessing and taxing the full value of their company rather than just the tangible property owned by the company. So they lobbied their legislators, got a temporary stop to having to pay any potential intangible taxes, and now three years later, this state question made it to the ballot where it will be overwhelmingly approved.

I'm not even saying that it's necessarily a bad idea to do away with intangible property taxation for businesses, and I certainly think that the difference in taxes paid due to the differing jurisdictions of the assessors is unfair. I just think it's misleading to bring this measure up to the public without explaining whom this tax affects. And comparing it to Florida's intangibles tax, which was a tax on the value of mutual funds and other assets held by actual individuals, is even more misleading.

Oklahoma State Questions: Now With Fewer Constitutional Issues!

Personhood Amendments! Open-carry laws! Arizona-style immigrant crackdowns! Taxing violent video games!

None of this stuff made it to the ballot in Oklahoma this year, and I have to say I'm a little bit disappointed.  I mean, I've moved away now, so whatever racist, socially conservative backwards-thinking constitutional amendments pass in Oklahoma can only serve for fostering community with my fellow out-of-state liberals as we all gather to shake our heads at the backwardness of "some states".  And I was really looking forward to getting an outsider's perspective on whatever outrageous constitutional amendments could possibly follow up 2010's batch of State Questions, when my fellow Oklahoma residents put in place new voter ID laws and English-only laws, and when we got rid of those twin scourges, Obamacare and Sharia Law.

2012's questions are for the most part very tame and actually constitutional.  There is one glaring exception though: State Question 759.  SQ 759 bans affirmative action for state and local governments.  Oklahoma law currently prohibits quotas for public employment or for government contracts, and the public universities don't use race as a factor in admissions, but there is an Office of Equal Opportunity Workforce Diversity which tracks diversity and sets policy targets to improve diversity in government agencies.  I don't really want to get into the merits of this policy; I would much rather make fun of this quote from fetus-food-banning senator and all-around dim bulb Ralph Shortey, who believes that by banning affirmative action, Oklahomans will be banning racism itself.

State sen. Ralph Shortey (R), one of the measure’s sponsors, said that the measure shows that Oklahoma is “becoming more color-blind.”

“One of the big reasons we need it is Oklahoma is perceived nationwide, and it is not warranted, as a racially biased state,” he said. “We don’t need that.”

Kumbaya, and all that.

There are other bad policy state questions, but these are less sensational that SQ 759.  State Question 758 lowers the cap on annual property tax valuation increase from 5% down to 3%.  This is great news if you don't have kids that go to public school and you own a house in a good neighborhood where house prices are likely to rise.  It's not so great if you own a home in, say, south Oklahoma City or the older parts of most Oklahoma cities, or if you rent.  This policy shifts some of the burden of taxation from the well-off to the poor, and while it seems like such a minor change, you have to remember that there are winners and losers to even the smallest of tax changes.

Speaking of seemingly small tax changes, State Question 766 deals with something called intangible property tax, and it is on the ballot, as Joy Hampton of the Norman Transcript reported, because of a lawsuit that Southwestern Bell lost in 2009.   Southwestern Bell claimed that all of its intangible property was exempt from ad valorem taxation, but a court said that only the property specifically exempted under a particular section of the Oklahoma constitution was exempted from taxation.  Southwestern Bell got mad, rallied support from the business community, got the state Chamber of Commerce involved, lobbied the legislature, and now three years later they have a State Question on the ballot that asks voters who know nothing about ad valorem taxation to deem whether or not it is appropriate to tax "intangible" property with these examples in the ballot language:

• patents, inventions, formulas, designs, and trade secrets;
• licenses, franchise, and contracts;
• land leases, mineral interests, and insurance policies;
• custom computer software; and
• trademarks, trade names and brand names.

Nowhere in the ballot language written by Obamacare-suing Attorney General Scott Pruitt does it tell people that this measure only affects corporations, not human beings.

But unlike in 2010, there are some measures that almost everyone agrees are good policies.  State Question 762 would finally end Oklahoma's distinction as the only state where every single parole decision must be approved by the governor.  This policy restricts the number of parolees freed from prison each year and has led in part to Oklahoma having one of the largest percentages of the population behind bars, including the highest incarceration rate of women in the nation.  State Question 762 is backed by both Democrats and Republicans, including the governor and the speaker of the house.  It is opposed only by district attorneys and, well, Oklahoma voters probably.

As a civil engineer, I have to support State Question 764, which gives the Oklahoma Water Resources Board the power to issue bonds for water and sewerline improvement projects in conjunction with the state's comprehensive water plan to upgrade facilities in rural Oklahoma.

Finally, State Question 765 reforms the Department of Human Services.  In 2005, a little girl in foster care died due in part to negligence by Oklahoma DHS.  Oklahoma DHS was sued, and as a result of the settlement of that lawsuit, Oklahoma DHS was restructured to provide more oversight; the speaker of the house acknowledged that “the system has been struggling under an outdated, ineffective governance model that has tended to isolate the agency from any real accountability.” Lawmakers passed the required legislation to improve the system, part of which was making the head of DHS accountable to the governor and not some unelected board.  But they couldn't fully get rid of a residual part of the old system, the DHS commission, since it was created by the Oklahoma constitution and constitutional changes are something that voters have to decide on.  

Just a bit of bipartisan housecleaning, should be no problem, right? Well, when the aforementioned Attorney General Scott Pruitt wrote up the ballot language for this state question, he characterized it as follows:

The measure amends the Oklahoma Constitution. It abolishes the Oklahoma Department of Human Services, the Oklahoma Commission of Human Services and the position of Director of the Oklahoma Department of Human Services.

He writes more stuff, but doesn't really explain the full story of what's going on here. So some voters might think that they're getting rid of DHS and everything they do.  But then again, being Oklahoma, some may mistakenly interpret this as a step towards smaller gubmint. 

Regarding State Questions, Oklahoma, there are very few opportunities this year for me to laugh and point at you.  To make up for this, please feel free to unmuzzle Ralph Shortey some more.