- Associated Press - Tuesday, February 2, 2016

OKLAHOMA CITY (AP) - Opposition surfaced Tuesday against several bills that would rein in costly state tax subsidies, sending a strong signal to lawmakers that taking them away will be no easy task, even amid a steep budget shortfall.

Gov. Mary Fallin and Republican state legislative leaders all have endorsed repealing or reducing various tax exemptions and deductions as a way to help close a $900 million hole in the state budget.

And while tapping some of the hundreds of millions of dollars’ worth of tax incentives and credits is tempting for budget writers looking to close the funding gap, the political reality is that each of the incentives has a constituency prepared to fiercely defend them.

The Senate Finance Committee on Tuesday killed one bill that would have prohibited companies from taking advantage of two separate tax incentive programs at the same time. Sen. Mark Allen’s bill would have prevented industries from “double dipping” and receiving state subsidies from both the Quality Jobs Program and a separate tax credit for investments that create new jobs.

“Anybody can make a profit when someone comes in and pays 50 percent of your payroll costs,” said Allen, a Spiro Republican.

Republican Sen. Clark Jolley of Edmond voted against the bill, arguing the incentives are working to lure companies to Oklahoma and diversify the state’s economy.

“When we’re already seeing our major economy in oil and gas get its rear end handed to it by an economic depression in oil prices, I don’t think now is the time to provide more uncertainty in (the Oklahoma Department of) Commerce’s ability to recruit and retain new jobs in our state,” Jolley said.

Another bill to reduce the amount of tax incentives the state pays to producers of wind power also faced bipartisan opposition before passing on an 8-3 vote.

Sen. Kim David, a Republican from Porter, said she was hesitant to reduce incentives for an industry that already has invested millions of dollars’ worth of infrastructure in Oklahoma.

“Talk about uncertainty for industry coming into our state and being willing to invest,” David said. “I have a real problem with this.”

While reducing subsidies for businesses and industries is politically difficult, Sen. Marty Quinn, who authored the bill to scale back wind power incentives, said lawmakers won’t have enough money to fund critical state functions like prisons, child welfare and public education unless they are willing to make tough decisions on tax credits.

“Go call your constituents and ask if they would rather have a teacher pay raise or pay $270 million a year for the next 10 years for this subsidy,” Quinn, a Claremore Republican, said. “Ask them that, and I think every single one of you know what the answer would be.”

Even while legislative leaders bemoan the growing cost of various tax expenditures, the committee unanimously passed a bill creating a new sales tax exemption for a Tulsa-area veterans group that was projected to cost the state about $2,800 annually.


Follow Sean Murphy at www.twitter.com/apseanmurphy

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