Faced with a state budget deficit of
immense proportions, Oklahoma
Governor Mary Fallin proposed a list of
new taxes earlier this year on a wide
range of services, including many that
would negatively affect the commercial
real estate sector. BOMA/Oklahoma City used
the proposed legislation as an opportunity to remind state
legislators of the economic value that commercial real estate
represents to the Sooner State and emphasize the harm
such taxes would inflict on businesses of all sizes.
Governor Fallin had been looking for strategies to balance
the state budget, as Oklahoma faces a deficit of nearly
$1 billion. Depressed state revenues over several years
already had forced the state to cut funding previously seen as essential. This problem gained national attention when
dozens of Oklahoma school districts scaled down to four-day
school weeks to avoid closures.
However, according to BOMA/Oklahoma City, the governor’s
proposal would have further threatened an already
weak state economy. Tax hikes were proposed on a sprawling
list of more than 160 services, many of which targeted commercial real estate directly, as well as services used by
commercial properties, such as window washing, landscaping
and bookkeeping. Although BOMA/Oklahoma City fully
supports a balanced budget, the local association believed
these specific taxes would do more harm than good. “Many
of our members were concerned,” says Dolores McNiven,
RPA, BOMA/Oklahoma City’s executive director. “Not only
would our members be directly affected by a sales tax on
management fees and commissions, but building operating
expenses would also increase.”
BOMA/Oklahoma City’s Advocacy Day at the Oklahoma
State Capitol in May provided a well-timed vehicle for visiting
legislators and ensuring that taxes on services did not
find a foothold as policymakers scrambled for solutions. “We
look forward to this event every year as a way to build our
name recognition with state legislators, so they know who
we are and what we represent,” McNiven explains. “But, this
year, we also needed to focus on sharing our concerns about
the proposed taxes.”
Prior to the event, the local association engaged its members
and coordinated with the advocacy staff at BOMA
International, who provided assistance with messaging on
the issue and strategizing for the event. On Advocacy Day,
local industry leaders went door-to-door in the state capitol,
meeting with legislators and their staffs and gathering the
latest updates on the budget. The group left reassured that
their message was well-received, but also aware of the need
to remain involved while the budget impasse continued.
On the final day of the legislative session at the end of May,
state lawmakers passed a budget bill without any of the
taxes BOMA/Oklahoma City opposed, giving the local association
a well-earned victory.
The budget crisis may drag on due to competing interpretations
of the constitutionality of the last-minute deal that
eventually was reached. As a result, BOMA/Oklahoma City
plans to remain vigilant in the short term to ensure that the
proposed taxes do not reappear. The local association also is
working to ensure it has a voice in the longer-term discussion
of the state’s structural budget problems.
Nationally, Oklahoma serves as an example of the unpopularity
of taxes on these types of services—and it also shows
how advocacy at the state and local levels can be effective
in preventing harmful legislation. “There are always ways
to get involved,” shares McNiven. “Make connections at the
state and local government level, and don’t hesitate to contact
BOMA International for ideas. Advocacy requires participation,
and any participation can make a difference.”
ABOUT THE AUTHOR: Ken Rosenfeld joined BOMA International
this spring as the director of State and Local Affairs. Rosenfeld
is the former policy director at the National League of Cities,
the association representing the nation’s mayors and council members,
and he previously ran his own consulting firm. With his
extensive background in public policy and community organizing,
he will serve as an important resource to BOMA state coalitions
and local associations looking to increase their advocacy efforts.
This article was originally published in the July/August 2017 issue of BOMA Magazine.