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Oklahoma House panel votes down measure to review tax credits

Oklahoma Rep. David Dank, R-Oklahoma City, has spent the past seven years looking into business tax credits. He said House Bill 1371's defeat likely ends his battle to have Oklahoma cut back on business tax credits.
BY MICHAEL MCNUTT Published: February 12, 2013

A legislative panel rang the death knell Monday on a lawmaker's seven-year crusade to scrutinize business tax credits by rejecting a bill that targeted 32 credits to pass legislative muster to continue.

“The lobbyists win,” state Rep. David Dank said after the House of Representatives Subcommittee on revenue and taxation voted 10-3 to not advance House Bill 1371. “They continue to win.

“The legislators do not have the will to look at the multimillions of dollars that are being given away in tax credits and determine which ones are benefiting the state and which ones aren't,” he said.

Among the major credits targeted in HB 1371 were those for the coal and wind industries, establishing a home office in the state, renovating historical buildings and building energy-efficient homes. Dank's legislation came after he headed a special committee last year and a task force in 2011 that studied tax credits.

Dank, R-Oklahoma City, said his bill's defeat also cripples efforts to significantly reduce the state's personal income tax rate, a key priority for the Republican-controlled Legislature and GOP Gov. Mary Fallin.

The governor has proposed a cut of 0.25 percent, reducing the top rate from 5.25 percent to 5 percent, with the lost funds being made up by state revenues.

Fallin and others introduced more aggressive cuts last year, but those depended on eliminating virtually all tax credits and deductions to help make up for lost revenue. Legislation targeting tax credits and deductions failed to advance.

“We're not ever going to get significant cuts as long as we're giving away the store, and that's what we're doing,” Dank said.

The defeat of HB 1371 came one year after another House subcommittee voted down a bill that would have outlawed transferable tax credits, which would have saved the state nearly $30 million a year. The defeat of that measure derailed last year's efforts to get a significant cut in the income tax rate.

Dank filed a similar measure this year, but removed it from consideration Monday after HB 1371 went down in defeat.

Lawmakers voting against the measure said it was unfair because it identified only certain business tax credits.

They felt that some of the credits that benefited their districts were unjustly targeted and that all credits and economic incentives, such as those given to the oil and natural gas industry, should be reviewed.

Rep. Mike Brown, D-Tahlequah, said poultry litter and dry fire hydrant credits don't produce a lot of jobs and likely would have failed the criteria set in HB 1369, but they provide jobs and help the economy in his district.

“There were good things about Dank's bill, and he's done a yeoman's job at working on this, but you've got to be fair about it, and this bill wasn't fair,” Brown said. “It picked winners and losers. There were a lot more small losers than the big winners.”

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