OKLAHOMA CITY – The chairman of a task force studying tax creditsissued recommendations November 9 for reining in the economic incentivesthat have cost the state upwards of $500 million.
Rep. David Dank, chairman of the Task Force on State Tax Credits andEconomic Incentives, said special interests have benefitted from the taxcredits and a few have manipulated the system for personal gain.
“What I think most of us believe after all we have heard here is thatfar too many tax credits and other incentives enacted in the past werecreated for the wrong reasons, and in the wrong way,” said Dank,R-Oklahoma City. “Many were enacted virtually in secret.”
Dank called for the elimination of transferable tax credits, which canbe sold to reduce tax liability.
The practice of enacting tax credits or economic incentives in thefinal days or hours of a legislative session also needs to end, Danksaid.
House Appropriations and Budget Chairman Earl Sears, R-Bartlesville,said he supports a ban in the last two weeks of legislative session.
And any future tax credit “needs to come wrapped in a clear andaccurate fiscal impact study,” Dank said.
Credits must be designed to create or save jobs, he said, and must beused as a last resort, not a primary driver.
The state auditor and inspector should be required to examine every taxcredit, beginning at the draft stage and continuing on a year-to-yearbasis, Dank said.
State Auditor and Inspector Gary Jones said his office could performthe audits, but it may require additional funds.
Tax credits should be subject to the Oklahoma Open Records Act, Jonessaid.
Dank said the state can no longer afford “open-ended” tax credits.
“We’re coming out of a severe state budget crisis, but there willalways be another one somewhere down the road,” he said. “Any futuretax credits need to have enforceable caps and limits.”
Rep. Mike Reynolds, R-Oklahoma City, said lawmakers need “to quitstudying the issue and take action.”
The task force has met eight times. It meets again Nov. 30, whenmembers will vote on specific proposals to recommend to lawmakers.
Dank said he will offer legislation for amending the OklahomaConstitution to put conditions and benchmarks on tax credits.