These comments were excerpted from a speech by Maryland Governor Martin O’Malley to a plenary session of an annual healthcare conference hosted by FamiliesUSA.

Our country is now poised through the Affordable Care Act to help millions of American families and small businesses and their employees access high quality, affordable health care coverage.  This isn’t going to happen by itself.  This is not simple.  If it were simple, someone would have accomplished it years ago.  This is complicated, but it is not beyond our grasp [..]

We are ready in Maryland to turn the corner on the healthcare costs that have been sapping our productivity as a people and as a nation.  Sapping the productivity of our businesses.  Taking from them the ability to reinvest in their own plants and their own opportunities and their own markets. Costs that force moms and dads to choose between health care and paying for groceries, or tuition, or school supplies, heat, rent, mortgage payments.  These are the big decisions that happen in the most important place – the kitchen table of every family home.

In Maryland we believe we are gaining a competitive advantage by being an early implementer [of health care reform].  Last year we had the best year of new job creation that we’ve had since the recession hit [..] Why is it that at the same time we’ve cut 7.5 billion from our state budget, we’re increasing the ranks of those who are covered by healthcare so very, very dramatically?  It’s because there is an historic truth – not a Democratic truth or a Republican truth – but an American truth and an economic truth.  In order to create jobs, a modern economy requires modern investments. Read the rest of this entry »

Several state leaders have taken to promoting more income tax cuts as the best way to improve Oklahoma’s economy. But is that true? We recently heard Timothy Bartik, senior economist at the Upjohn Institute for Employment Research, discuss the latest research on which state-level policies are most effective at boosting the economy. [You can see the full transcript of his remarks here.]

Bartik explained that across-the-board business tax cuts are usually not the most cost-effective tool for economic development. Because state government resources are small relative to the size of a state’s economy, we need policies with a high “bang-for- the-buck” to see meaningful increases in per capita earnings. Across-the-board cuts are not targeted enough to account for the opportunity cost of paying for them though reductions in public services or increases in other taxes.

Instead, Bartik recommended five policies with proven effectiveness and high bang-for-the-buck: Read the rest of this entry »

ConocoPhillips headquarters in the Energy Corridor area of Houston

Why do some companies choose to locate their businesses  in Texas rather than Oklahoma? During the first two meetings of the Task Force on Comprehensive Tax Reform, co-chair Representative David Dank has stated repeatedly that the absence of the personal income tax accounts for the cases where Texas wins out in relocation and investment decisions.

Finding hard evidence to support his case, however, has proven elusive. At a recent Task Force meeting, Wes Stucky, CEO of the Ardmore Development Authority and a widely respected leader in the economic development field, spoke of his long-standing efforts to bring investment and jobs to Ardmore. Stucky told the Task Force:

For 24 years, I’ve been conducting interviews with executives of companies that we tried to recruit to Ardmore that ended up locating elsewhere. Not once in all those years did a company that rejected Ardmore base its decisions on taxes. Read the rest of this entry »

Photo by Flickr user shyb used under a Creative Commons license.

With Congress unable to agree on a bill to extend operations of the Federal Aviation Administration, the agency has been partially shut down since last Friday. Numerous construction projects were halted, nearly 4,000 federal workers have been furloughed, and $200 million a week in aviation taxes are not being collected.

The situation is another unfortunate example of how gridlock in Washington is imperiling economic recovery. Yet it also serves as a useful natural experiment– one that contradicts an argument commonly used by opponents of taxes and government regulation.

Whenever a new regulation or tax on business is proposed, opponents are quick to argue that the costs will be passed on to consumers, especially when the industry in question is politically unpopular. The hope is that even though voters aren’t sympathetic to, for example, big banks, they will oppose new regulation to protect their own pocketbooks. Read the rest of this entry »

Last week, 17 of the top business executives from the Kansas City area made an unexpected request to the governors of Kansas and Missouri – they asked to end tax incentives for their businesses. The letter describes competing incentives as inciting an “economic border war,” where companies get escalating payoffs to move back and forth across state lines, with no benefit to the larger community. The business leaders wrote:

At a time of severe fiscal constraint the effect to the states is that one state loses tax revenue, while the other forgives it. The states are being pitted against each other and the only real winner is the business who is “incentive shopping” to reduce costs. The losers are the taxpayers who must provide services to those who are not paying for them.

Read the rest of this entry »

When we discuss government budgets, direct spending receives the most attention by far. Less noticed is the substantial expenditure on tax credits and incentives, what some have called the “submerged state.”

That inattention may have allowed several unconstitutional measures to sneak through in Oklahoma. At the end of 2010, outgoing Attorney General Drew Edmondson issued an opinion on the constitutionality of Oklahoma tax credits. The opinion was requested by Rep. David Dank, R-Oklahoma City, who chairs the House Revenue and Taxation subcommittee. An AG opinion does not have force of law–only a court can legally determine constitutionality–but it can provide guidance to lawmakers and the courts. Read the rest of this entry »

Shelley Cadamy is a native Oklahoman and adoptive/foster parent who has done economic development work in Oklahoma since 1994.

During a Leadership Oklahoma City session several years ago, I had the opportunity to ask the Oklahoma City Police Chief and Oklahoma County Sheriff what one thing each would change if they could. The answer was clear and unanimous – expand care for the mentally ill.

Regardless of one’s views on a government’s moral responsibility to its mentally ill citizens, the economic arguments for treating the mentally ill are staggering. According to the Oklahoma Department of Mental Health & Substance Abuse Services (ODMHSAS), the greatest direct cost associated with untreated mental illness and addiction in Oklahoma is to the state Department of Corrections and the overall criminal justice system, which must bear the financial burden as increasing numbers of untreated mentally ill Oklahomans cause disturbances and become incarcerated. Out of 25,000 inmates, the Oklahoma Department of Corrections estimates that nearly 12,000 have a history of, or are currently exhibiting, some form of mental health problem. Read the rest of this entry »

Oklahoma is doing a better job of providing public disclosure of economic development subsidies being paid out to companies but still has considerable room for improvement, according to a new report from Good Jobs First.

The report, titled Show Us the Subsidies: An Evaluation of State Government Online Disclosure of Economic Development Subsidies, evaluates the performance of all 50 states in making available online information on companies receiving state and local tax breaks, cash payments, and other subsidies.  In the press release accompanying the report, Good Jobs First Executive Director Greg LeRoy points out that the state fiscal crisis has provided an impetus for increased disclosure of subsidy programs in many states:

With states being forced to make painful budget decisions, taxpayers expect economic development spending to be fair and transparent… Claims that sunshine would hurt a state’s business climate have been discredited, trumped by people’s rising expectations about government information being online.

In addition to giving states overall grades, the study rates the reporting practices of 245 key economic development subsidy programs from around the country based on the online disclosure of information such as company‐specific dollar amounts, job‐creation and wage‐rate numbers, and the geographic location of subsidized facilities. Programs are also evaluated in terms of how easy it is to find and use the online data.  Across the nation, nineteen subsidy programs received total scores above 75 out of 100. Nine of the top 13 rated programs are in Illinois, North Carolina and Connecticut. Read the rest of this entry »

In a recent post on our blog, Paul Shinn looked at state tax incentives and made the case for holding them to the same standards of accountability as direct government spending programs.  In the new blog at Tax.com, David Brunori, who is among the most knowledgeable and sharpest tax policy experts in the nation, pulls no punches in taking aim at the bidding wars that often break out between states hoping to attract or retain manufacturing facilities. In this case, he’s discussing the competition between Indiana, Kentucky and Tennessee to lure Harley-Davidson to open a motorcycle assembly plant in their states. Brunori writes: Read the rest of this entry »