by David Blatt, Oklahoma Policy Institute
“Tax revenue drop not a reason to end credit” (Our Views, Dec. 18) takes issue with a report by Oklahoma Policy Institute on why Oklahoma’s tax breaks for horizontal drilling have become unnecessary and unaffordable. The editorial wrongly paints OK Policy with positions it’s never taken. It doesn’t present a single argument to refute OK Policy’s criticism of these credits.
The argument is simple: Tax exemptions created to encourage what were once novel and risky methods of drilling have become unnecessary and counterproductive now that these techniques are standard practice. The editorial stated, “Oklahoma lawmakers determined years ago that staying competitive with Texas meant creating a modest tax credit for risky drilling.” Today, though, this type of drilling is no longer risky; the tax credit is no longer modest. Ninety percent of the rigs operating in Oklahoma are engaged in horizontal drilling. The cost of Oklahoma’s tax credit, already over $100 million annually, continues to grow.
The oil and gas industry certainly contributes much to Oklahoma’s economy. It’s also politically influential. This shouldn’t be a reason to hand out tax credits long past their usefulness, at the expense of all Oklahoma taxpayers. Oklahoma Policy Institute stands for fiscal responsibility, expanded economic opportunity and the fair and efficient delivery of core government services. For all these principles, it’s time to curb this tax giveaway.