OKLAHOMA CITY – Members of the Task Force on State Tax Credits and Economic Incentives voted today to require greater tax-credit transparency and mandatory pre-approval for those seeking tax credits.
Those recommendations, along with several other reforms endorsed at previous meetings, will now be presented to the governor and legislative leaders.
“There is a general consensus here that says tax incentives that create real, lasting jobs are worthy, while those that fail that basic test are not,” said state Rep. David Dank, an Oklahoma City Republican who chairs the task force.
In calling for greater transparency, Dank noted that it had become clear that until recently “few members of the Legislature had even the dimmest concept of how many tax credits we had on the books, how much they cost or even where they were going. The taxpayers certainly didn’t either.”
He endorsed a system of reporting that will ensure that “everyone involved sees and knows exactly what is going on and what is at stake, down to a dollar-by-dollar accounting of where these credits and incentives are going and what they are achieving.”
In calling for a pre-approval process, Dank noted that the current system for obtaining many tax credits seems “to be almost automatic” with no future cross-checking for re-approval process for recipients.
“If I go down to buy a car this afternoon, it doesn’t matter that I bought one ten or twenty years ago,” Dank said. “I’m going to have to be pre-approved before I drive that care off the lot. The same rules should apply to tax incentives.”
The task force voted to include both recommendations in their final report.
The group has previously endorsed elimination of transferable tax credits and called for mandatory fiscal impact reports on all tax credits, caps on tax credits, annual audits of tax credit programs, routine analysis of each credit’s effectiveness at permanent job creation, and expiration dates for all tax credit programs with the option for legislative re-authorization.
The group also endorsed a prohibition on hearing tax-credit bills during the final hectic days of the legislative session.
Although elimination or restriction of many tax credits programs will likely draw strong opposition from the groups that have benefited from them, Dank urged lawmakers to consider the bigger picture.
“Starting right now, remind yourself every day that the only lobbyist that counts is the people who elected us,” Dank said. “They may not hang around in the halls here at the Capitol, but they are here in spirit.”
The Task Force on State Tax Credits and Economic Incentives’ final report will be submitted to legislative leaders and Gov. Mary Fallin by Dec. 31. The report will be used to craft legislation for the 2012 legislative session.