Economic tax credits once again will come under scrutiny by a special House panel.
An interim House of Representatives task force that met for five months last year suggested outlawing transferable tax credits and developing criteria for tax credits to meet, but the recommendations failed to advance in the session this year.
Failure to eliminate or reduce the tax credits also helped cripple attempts to lower the state's personal income tax rate. Four proposals introduced during the session basically called for cutting the top personal income tax rate of 5.25 percent by more than half, but the proposals depended on eliminating virtually all tax credits and deductions to help make up for the lost revenue.
House Speaker Kris Steele announced Wednesday the formation of the House Tax Credit and Economic Incentive Oversight Committee. The bipartisan panel will hold hearings between September and November to look at the effectiveness of economic tax credits and incentives.
The committee will review economic tax credits and incentives claimed by business entities. It will not review personal tax credits or incentives that are claimed by individuals.
“Tax credits that help create jobs and return more to the state than they cost are worthwhile, but many others amount to giveaways that provide no net benefit to the state,” said Steele, R-Shawnee. “As fiscal conservatives, our focus remains on keeping the valuable tax credits that grow our economy while reforming or eliminating the rest.”
Rep. David Dank, who headed last year's task force, asked for the special committee. He will serve as chairman.
The committee's goal is to continue educating legislators about the effectiveness and ineffectiveness of economic tax incentives and to develop potential tax credit policy changes for consideration next session, according to the speaker's office. It will not be a standing committee during next year's session.
“We fully intend to keep shining a light on these credits until the job is done,” said Dank, R-Oklahoma City. “The special oversight committee will continue to heighten our understanding of tax credits so legislators can make the best decisions possible for the taxpayers. Once you learn the truth about some of these credits, it becomes painfully obvious that more safeguards are needed to assure that every taxpayer dollar we invest yields real returns in the form of new jobs and greater prosperity — not just special deals for special interests.”