In the States



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.