Panel passes bill to increase Oklahoma homestead exemption

OKLAHOMA CITY – A Senate committee on Monday passed a bill to reduce property taxes.

Senate Bill 1809, by Senate President Pro Tem Lonnie Paxton, R-Tuttle, would increase the homestead exemption to $5,000 from $1,000 beginning in tax year 2027.

A homestead exemption reduces the amount of property taxes paid by people who live in their homes by shielding part of the home’s value from taxation.

The Senate Revenue and Taxation Committee passed the measure by a vote of 9-2.

The bill passed with the title off, a move designed to slow the measure down in the legislative process.

Sen. Warren Hamilton, R-McCurtain, who presented the bill, said he did not know the expected fiscal impact  of the measure.

While the state does not receive property tax revenue, school districts, counties, libraries and CareerTechs rely on it to fund services. 

Senate Minority Leader Julia Kirt, D-Oklahoma City, questioned if the bill should advance without knowing the fiscal impact.

Lawmakers have been hearing about property taxes and need to take action, Hamilton said.

“The people that are going to get the most relief from this measure are the people that have a lower homestead value, as opposed to those that have a very high homestead value,” Hamilton said. “And the ones that this is geared to protect are going to be the elderly and those on a fixed income.”

Kirt said seniors can currently take advantage of a property tax freeze. She said the measure could be more targeted to the low income and seniors as opposed to applying to everyone.

Home values in the metro areas are higher than those in rural areas due to land values, said Sen. Mark Mann , D-Oklahoma City.

“It’s going to give a disproportionate amount of relief to those individuals that live in a metro area versus a rural area,” Mann said.

Citizens should not be renting from the state government for the rest of their foreseeable futures, said Sen. Shane Jett, R-Shawnee.

Jett is one of three proponents of an initiative petition, State Question 843, that seeks to gradually phase out property taxes for those with a homestead exemption. Supporters would need to collect 92,263 signatures to get it on a future ballot.

Paxton has strongly criticized that plan.

Sen. Brent Howard, R-Altus, said the $1,000 homestead exemption has been on the books since 1938.

Senate Bill 1809 still must clear the full Senate before it can be considered by the House.

Editor’s note: This story was updated at 6:55 p.m. Monday, Feb. 16, to clarify that the proposed state question applies to those with a homestead exemption.