Joe Wertz / NPR StateImpact
Joe Wertz / NPR StateImpact
The tax credit task force is winding down.
On Wednesday, the panel discussed its final report and the criteria by which it would evaluate tax credits and economic incentives, which are estimated to cost the state between $250 million and $500 million in revenue each year.
State Rep. David Dank, who co-chairs the Task Force for the Study of State Tax Credits and Economic Incentives, listed nine ideas for the panel’s final report, the content of which will be voted upon at the task force’s Nov. 30 meeting.
Task force members took turns offering up ideas for the final report, but the bulk of the suggestions mirrored Dank’s.
In his opening remarks, Dank, R-Oklahoma City, reminded the panel that they represent taxpayers, not special interests. He reiterated that not all tax credits and incentives were bad. Some, like the Quality Jobs program, are effective and well-managed, he said.
“We are not against business. We don’t oppose growth. We believe that government policy can help create jobs,” Dank said.
Most of the task force’s debate and discussion centered on two of Dank’s ideas: transferability and the auditing requirement.
[module align=”right” width=”half” type=”pull-quote”]
“I’m not yet opposed to enhancing the auditor’s authority, but I’m not yet convinced.”
Transferable tax credits have drawn the ire of many task force members. At an October meeting, the panel discussed Coal Production Tax Credits, which are purchased by insurance companies for 80 to 90 cents on the dollar and used to offset money owed in state taxes.
The coal credits have cost the state more than $60 million in lost tax revenue over the last eight years, according to a report by nonprofit journalism outfit Oklahoma Watch.
State Treasurer Ken Miller agreed that “stricter controls” were needed to curb abuses, but argued for more research before a final decision was made on recommending the elimination of transferable tax credits.
“If we’re legislatively willing to offer a certain cost for a certain benefit, and the incentive is meeting its desired effect, I’m not sure it matters who claims the benefit,” he told the panel.
Philosophically, all the task force members agree: There needs to be a robust financial analysis and examination both before and after businesses start receiving tax credits and incentives.
The debate is over the details.
It was suggested that the State Auditor and Inspector’s Office might be in charge of such analysis, but State Auditor and Inspector Gary Jones said he wasn’t sure, functionally, if his office was set up to handle the pre-approval records examination.
Jones said his office would take on the responsibility of auditing tax credit and incentive recipients — either annually or every other year — but would likely need additional funding to do so.
Some task force members, Miller in particular, worried that adding authority and money to the Auditor’s Office was an unnecessary expansion of government.
“I’m not yet opposed to enhancing the auditor’s authority, but I’m not yet convinced,” Miller said.
Senate Minority Leader Andrew Rice, D-Oklahoma City, a task force member who is resigning Jan. 15 to move to Nashville, Tenn., where is wife recently accepted a job, echoed Miller’s concern, but suggested that any auditing process not let lawmakers “off the hook.”