March 11, 2015

Bill Excludes Auditor’s Office From Tax Incentive Review

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CAPITOL WATCH

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M. Scott Carter

M. Scott Carter

M. Scott Carter reports on politics, legislation and other issues from the State Capitol.

 

 

 

A bill that creates a commission to evaluate state tax incentives won’t include oversight from the state auditor’s office, Speaker of House Jeff Hickman said Wednesday.

House Speaker Jeff Hickman

House Speaker Jeff Hickman

Authored by Hickman, R-Fairview, House Bill 2182 would add a new level of oversight to Oklahoma’s tax incentive system. The bill would create a seven-member Incentive Evaluation Commission charged with reviewing incentives every four years.

Members of the commission would include the director of the Office of Management and Enterprise Services, the state treasurer, the secretary of the Oklahoma Department of Commerce and the chairman of the Oklahoma Tax Commission. The incentive commission would also include an economist representing an Oklahoma institution of higher education, the president of the Oklahoma Professional Economic Development Council and a layperson.

Language in the bill would allow the commission to contract with a private company or academic institution to “assist with evaluation of each incentive.”

But state Auditor and Inspector Gary Jones said there was no good reason to hire outside help to review tax incentives. Instead, Jones said, the commission should use his office.

For several weeks now, Jones has lobbied lawmakers to change the bill and have the auditor and inspector’s office perform the evaluations.

State Auditor Gary Jones

State Auditor Gary Jones

“Virtually every other state has the state auditor doing this,” Jones said. “It’s OK to have a subcommittee approve it and it’s OK to have the commission set the criteria, but you need a neutral set of eyes reviewing them (tax incentives).”

The bill comes in wake of a reported dispute between the auditor and the office of State Treasurer Ken Miller over bidding practices by the state pension commission.

“I want to take politics out of the bill,” Hickman said, without elaborating.

An amendment to HB 2182 would require the auditor and inspector’s office to perform the evaluations. That amendment, authored by state Rep. Mike Ritze, R-Broken Arrow, would replace the outside contractor with the auditor’s office.

Ritze said he wrote the amendment because there was no need to pay for outside help when the state was facing a $611 million budget shortfall.

“Why do we have to pay some outside auditor that’s going to charge an enormous amount of money?” Ritze said. “Our auditor has all the resources to do this.”

Using the state auditor’s office, Ritze said, makes evaluations more transparent.

“We need to make sure that anything we do when it comes to the people’s money has good oversight by statewide elected officials,” Ritze said.

Still, while Jones and Ritze have pushed for changes to the measure, Hickman, the House Speaker, said it’s doubtful the auditor’s office would be included in the final version of the measure. Instead, Hickman said he would amend the bill to remove all statewide elected officials from the commission and replace them with business and industry officials who haven’t received any incentives.

Hickman said the measure could be heard by the full House as early as Wednesday.

  • Julie

    If I understand correctly, the evaluation is on the economic/fiscal effectiveness of an incentive. I don’t believe the auditor/inspector is qualified for that job. The work should be done by a reputable 3rd party economist who isn’t trying to run for office. It would be nice if the story better explained the purpose of the evaluation instead of running with the Auditor v Treasurer MMA round 2 perspective.

  • Gary

    Can’t see any reason to be contracting for auditing services when we have a state agency that performs that function.