Perhaps the strongest objection to an assessment limit over the last two years came from the Kansas Farm Bureau, which was concerned that a limit “could potentially reduce property taxes for certain classes of property on certain years when the appraised value of that property exceeds 3%” and prompt a shift in the tax burden. Our calculations indicated that agriculture would greatly benefit from a 3% limit, and newly acquired data from the Oklahoma Tax Commission show significant benefits for farmers in the Sooner State.
Since 2012, Oklahoma has had a 3% assessment limit on primary residences and agricultural land, and a 5% limit for other real estate. Agricultural improvements (structures built on ag land other than residences) are not subject to the assessment limit, just ag land. The same is true for commercial improvements.
The most recent (2024) Oklahoma data show just a 9% increase for taxable assessed ag land, compared to an 89% increase in Kansas.
Ag land assessed values in Oklahoma cannot increase more than 3% each year, whereas there is no limit in Kansas. The rolling average use value (as opposed to market value) leads to extended periods of spiking and declining values, as shown in the chart below.
The assessed values were on a rapid rise between 2012 and 2024, resulting in an 89% increase in valuation.
The trend would look very different, however, if Kansas had a 3% limit in effect since 2005. The large, often double-digit increases between 2012 and 2019 would have been capped at 3%, and the long-term property tax savings can be staggering. Even allowing for mill rate increases, we estimate that farmers would have saved more than $1 billion since 2005.
The change for residential assessed values is also much lower in Oklahoma at 77%, versus 99% in Kansas. Assessed value changes for residential, commercial, and agricultural improvements include property improvements and new facilities being built. In Kansas, that accounts for about 1% annual value growth, but Oklahoma doesn’t track those changes, so the impact of new additions is unknown. Still, it’s pretty remarkable that the assessed value of residential property in Oklahoma is $4.5 billion less than in Kansas, even though Oklahoma has more residential units (1.8 million vs. 1.3 million in Kansas, according to the U.S. Census Bureau.
Oklahoma’s commercial real estate is subject to a 5% annual assessment limit, but improvements to commercial property are not. Real estate assessed values increased by 68%, and commercial improvements jumped by 105%. Improvements are not reported separately from real estate in Kansas; the total increase over the period was 65%.
Minimal tax burden shift
Oklahoma saw very little shift in the tax burden among property classes since 2012.
The burden slightly increased for property not subject to the assessment limits. The personal property tax share increased by 0.5 percentage points, and the commercial property share increased by 1.68 percentage points, where the limit doesn’t apply to improvements.
The residential burden is essentially unchanged, and all other property experienced a slight burden decline.
Also, the statewide average mill rate didn’t jump as feared by some opponents of assessment limits. It increased just 3.8% over 12 years, going from 102.44 to 106.37.
Kansas farmers pay a lot more property tax than their Oklahoma counterparts
Mill rates vary by state due to factors such as assessment ratios, government spending decisions, mill rate caps, and the relative reliance on property taxes versus sales taxes to fund government services. Those variables can have a material impact on why property taxes in one state are higher than in another, but if they are consistent over time, they have little impact on the comparative changes in taxes paid over time.
That said, property taxes on Oklahoma agricultural land increased by 17% between 2012 and 2024, compared to 91% in Kansas. Ag improvements are not subject to an assessment limit in Oklahoma, which explains why the 96% tax increase is so much greater than that on the land. Still, property taxes on ag improvements in Kansas rose faster, at 103%.
Agricultural property taxes are $403 million overall in Kansas, and $237 million in Oklahoma.
It’s certainly fair to question the relative benefits of assessment limits. Still, the Oklahoma data makes two things pretty clear: assessment limits have been beneficial in Oklahoma, and property subject to assessment limits fares better than other property.
