Oklahoma Farm Bureau President Rodd Moesel discussed the impacts of potential changes to Oklahoma’s ad valorem tax structure with Oklahoma City Mayor David Holt and Tulsa Mayor G.T. Bynum during OKFB’s Leadership Week.
Though the divisions between urban and rural communities often receive the most attention, the conversation gave Moesel and the mayors an opportunity to highlight the ways both communities rely on one another.
Over the past several years, municipalities have pushed the state legislature to levy ad valorem taxes to fund public safety districts for police and fire services.
While Farm Bureau members are avid supporters of public safety, Moesel explained the organization is against increases in ad valorem taxes because farming and ranching is a capital-intensive industry that requires vast amounts of land and equipment.
Farmers and ranchers face uncertainty year after year from weather and commodity prices. Yet ad valorem taxes bills are due each year, regardless if producers make a profit or lose money.
While acknowledging the concerns of farmers and ranchers, the mayors shared the difficulties their cities face because they are reliant on sales tax revenue.
“When you are in a downward cycle in the economy, people tend to spend less, and you generate less sales tax revenue,” Bynum said. “Almost invariably crime starts to go up, and community after community is faced with the challenge to cut back on public safety funding.”
Public safety accounts for more than 50% of operating costs for most municipalities. Under current law, funding for public safety cannot come from property taxes.
The mayors argued allowing cities to use ad valorem taxes would help diversify and stabilize their revenue.
If passed, the mayors said the proposed legislation would exempt agricultural land and would still require approval by local voters.
“I understand how valuable the agricultural economy is to Tulsa and Oklahoma,” Bynum said. “I would not want to do anything to hurt that. If anything, I want to find ways to help it.”
Bynum acknowledged the Port of Catoosa is a major economic driver allowing agricultural commodities, building materials and much more to be shipped anywhere in the United States.
The Oklahoma National Stockyards located in Oklahoma City is the largest cattle market in the world bringing people to the city from across the state and world, Moesel mentioned.
“As much as I want people in Oklahoma City to understand our economic interdependence on rural Oklahoma, I also want them and rural Oklahomans to understand our basic human interdependence,” Holt added.
The mayors were both eager to work toward closing the gap between rural and urban Oklahomans.
“There is a great synergy between rural Oklahoma and our cities, like Tulsa or Oklahoma City, that fuels our abilities to thrive,” Bynum said. “It is really important to me as mayor that we have a good working relationship between the two of us.”
The mayors said they look forward to creating a better working relationship with Farm Bureau and rural and urban residents.
“All too often in Oklahoma, we find ourselves talking about what the disagreements are between urban and rural,” Bynum said. “There are a whole lot of things that we should be talking about that we can get together and work together on … I would love to work together with you all moving forward.”