Few would argue Oklahoma City should have simply refurbished its old ballpark instead of building a new one in Bricktown. One reason the Thunder is now in Oklahoma City and not Seattle is the new downtown arena. New hotels have been built in Oklahoma City as well.
Some of those facilities were taxpayer-financed, but city taxes funded those projects. The state's historic rehabilitation tax credit requires citizens across Oklahoma to subsidize projects mostly in Oklahoma City and Tulsa even as some small-town Main Streets die and local buildings rot. That's a tough sell.
Other perception problems challenge the tax credit's long-term viability. State Rep. David Dank, R-Oklahoma City, pointedly notes the state “apparently values old buildings more than we value old people” based on tax treatment.
The number of potential historic rehabilitation projects isn't the only metric lawmakers should consider. They also must account for the less-obvious impacts of tax policy. Focusing tax resources on preservation of older structures can reduce opportunity that would have been generated if new facilities replaced the old, or if the overall income tax rate were lowered across the board.
We support historic preservation, but the invisible hand of the market remains in effect. Whether a tax credit boosts historic rehabilitation or Oklahoma coal production, lawmakers must remember that a tax policy's immediate benefits can be more than offset by unintended consequences.