In The Know: Rep. Dank says tax credit controls and safeguards 'are often a joke'

In The KnowIn The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to You can sign up here to receive In The Know by e-mail.

Today you should know that Rep. David Dank is calling for the Oklahoma Supreme Court to rule on potentially unconstitutional tax credits. OK Policy previously discussed the attorney general’s opinion that several tax credits are unconstitutional. On the OK Policy Blog, former State Treasurer Scott Meacham writes that Oklahoma’s Rural and Small Business Tax Credit programs are bad tax policy run amok. A tax analyst testified to lawmakers that the state’s film tax credit recaptures only between 8 cents and 28 cents in new revenue for every dollar that it spends.

The Center for Public Integrity examines how Tulsa billionaire George Kaiser has used legal means to avoid paying taxes for himself or his companies. The Oklahoma Gazette reports on the protest beginning in Oklahoma City inspired by Occupy Wall Street. American Airlines announced that it is moving forward with its plan to relocate 230 jobs out of Tulsa within the next year. Bill John Baker has officially been named winner of the election for Cherokee Principal Chief.

Oklahoma officials argued that a Texas water district should use water in its own reservoirs rather than pursuing a court battle to acquire access to Oklahoma water. The Oklahoma smoking rate has reached a historic low, though it is still above the national average. A lawmakers studying to become a pharmacist has come out against making pseudoephedrine prescription-only. The Office of Juvenile Affairs has appointed two new administrators as part of a shake-up following violence at the Tecumseh juvenile correctional center.

Today’s Number of the Day is the number of primary care physicians per 100,000 people in Oklahoma. In today’s Policy Note, a report from the National Employment Law Project warns that if Congress doesn’t renew extended unemployment insurance by the end of this year, we risk plunging millions into deeper financial crisis and putting yet another obstacle in the path of economic growth.

In The News

Oklahoma Supreme Court should look into questionable tax credits, legislator says

Lawmakers should ask the Oklahoma Supreme Court to rule on potentially unconstitutional tax credits, the chairman of a legislative task force committee said Wednesday. “We need to get that process of testing these tax credits before the Supreme Court under way,” Rep. David Dank told members of the Task Force for the Study of State Tax Credits and Economic Incentives. An opinion issued last year by the state attorney general’s office stated some state tax credits were not constitutional. To be legal, tax-credit programs had to serve a public purpose, provide more benefit than cost and include adequate controls and safeguards, according to the opinion. An attorney general’s opinion stating that a legislative act is unconstitutional is advisory only, said Dank, R-Oklahoma City. Only a court can issue a binding opinion that a legislative act is unconstitutional.

Read more from NewsOK at

Previously: The three part test for tax credits — and the fourth part we should be asking from the OK Policy Blog

Scott Meacham: Rural and Small Business Credits are bad tax policy run amok

The Oklahoma legislature has struggled for decades with the best way to encourage capital investment in Oklahoma. Many ideas have been tried with varying degrees of success. The problem is that once the ideas are launched by the legislature, usually as tax benefits under Oklahoma’s tax code, they are all but forgotten. Tax benefits included credits against tax liability, deductions against income and, in some cases, direct payments from the State. No real processes exist to critically evaluate these programs and eliminate those that are not working. The result is that the least effective of these initiatives stay on the books and end up costing the state hundreds of millions in lost tax revenues. The Rural and Small Business Tax Credit programs are one of the prime examples of bad tax policy run amok.

Read more from the OK Policy Blog at

Film tax credits debated

Supporters of Oklahoma’s fledgling film industry on Wednesday defended rebates used to attract movie makers to the state. But Joseph Henchman, vice president for legal and state projects with the Tax Foundation, said governments lose revenue through the rebates because they don’t create enough jobs to offset the cost. The comments came during a meeting of a task force studying tax credits and economic incentives. The panel will issue recommendations to lawmakers about which incentives are ineffective and should be eliminated. “Independent studies that have estimated the impact of film spending calculate that state governments recapture only between 8 cents and 28 cents in new revenue for every dollar of tax credit,” Henchman said. “That is, these programs lose governments between 72 cents and 92 cents for every dollar spent on them, even after accounting for increased economic activity generated by film production.” Oklahoma sets aside up to $5 million annually to provide a rebate of up to 37 percent of the Oklahoma film production cost.

Read more from this Tulsa World article at

How an Obama fundraiser turned Oklahoma into a personal tax haven

An investment by Tulsa billionaire George B. Kaiser’s family foundation in Solyndra, whose bankruptcy may leave taxpayers on the hook for $535 million in federal loans, has raised speculation that the administration acted in part to aid a financial supporter. But the impact on taxpayers of Kaiser’s career goes far beyond the $535 million loss. Kaiser has built his fortune in part through shrewdly playing the Internal Revenue Code. In one six-year period, during which he increased his net worth enough to land him on the Forbes list of the 400 wealthiest Americans, Kaiser reported taxable income to the Internal Revenue Service just once, totaling $11,699 — equivalent to a full-time hourly wage of $5.62. Tax avoidance is legal — and the strategies Kaiser used to minimize his own and his company’s tax burden were certainly legal. How he did it had as much to do with the economics of the domestic and international energy markets and those of the state of Oklahoma as it did with the Internal Revenue Code.

Read more from the Center for Public Integrity at

Protest movement geared towards 99 percent of Americans gets started in OKC

The protests on Wall Street in New York City have grown, and even spread to other cities around the country. And that’s what the crowd of about 150 hoped to do at the northwest Oklahoma City park — organize a similar protest in OKC. Although the group was composed of many left-leaning and mostly young individuals, it also included Ron Paul supporters, some white-collar workers, several middle-aged and older individuals, and even a self-described Republican or two. The idea, many in the group said, is to represent the 99 percent of Americans, rather than the wealthiest 1 percent. Despite disagreement on some of the protest issues, the linchpin in each members’ involvement remained essentially the same: the belief that the system under which average Americans live has become fundamentally corrupt; that the very pillars of the democratic process and a democratic society have been subverted by corporations and the wealthy elite; that the majority of Americans have little voice in the system; and that the playing field has been tilted to exclusively favor those interests.

Read more from The Oklahoma Gazette at

American Airlines to relocate hundreds of jobs out of Tulsa

American Airlines announced Wednesday that it will be moving approximately 230 jobs from Tulsa to the Dallas/Fort Worth area. An airline spokesperson said the move will take place within the next year. The company says it’s moving its Maintenance Operations Center (MOC) from Tulsa and integrating it with its Systems Operations Control (SOC) in Dallas/Fort Worth. These jobs have been on the chopping block for about a year and a half. But American Airlines employees, their families, and local politicians have been waging a battle to keep those jobs here. They’ve rallied and picketed, pled their cases on the airwaves and asked for support in cyberspace, all to save 230 American Airlines jobs. Talk of the move prompted criticism from some political leaders, who say American has received $65-million in local and state tax incentives with the promise that jobs would stay in Tulsa.

Read more from NewsOn6 at

Bill John Baker named official winner in Cherokee Chief election

Bill John Baker is now officially principal chief-elect of the Cherokee Nation. About 1:45 p.m. Wednesday, the Cherokee Nation Election Commission certified the results from the tribe’s special election. The certified results show Baker defeating former chief Chad Smith, 10,703 votes to 9,128. Almost 20,000 Cherokee citizens voted in the special election, an increase of 5,000 people from the June 25 general election. Among the Baker supporters were several freedmen who came in part because of a tribal Supreme Court order issued Tuesday afternoon. The order, filed at noon, declined to recognize an agreement brokered in federal district court that reinstated the tribal citizenship of 2,800 freedmen descendants. The tribe’s attorney general, Diane Hammons, issued a statement Tuesday that the tribe does not have the option of ignoring a federal order. As of Wednesday, it is still unclear, what – if any – impact the justices’ order will have on the election.

Read more from this Tulsa World article at

Oklahoma Board disputes Texas water district’s claims

Oklahoma officials say a Texas water district could use water in Texas reservoirs rather than pursuing a court battle to acquire access to Oklahoma water. The Oklahoma Water Resources Board is making that argument to a federal appeals court which last month upheld the state’s laws restricting the exportation of Oklahoma stream water. The agency stated its position late Tuesday in a filing at the 10th Circuit Court of Appeals against the Tarrant Regional Water District, which provides water to 1.7 million people in the Fort Worth area. Tarrant is asking the Denver-based court to reconsider last month’s decision, which was Tarrant’s latest loss in four years of court fights to obtain water from southeastern Oklahoma. The board said it “is beyond the pale” for Tarrant to use a self-imposed claim of shortage when Texas has unused water stored in reservoirs that could be used.

Read more from NewsOK at

Oklahoma smoking rate reaches historic low

Oklahoma public health officials announced today that for the first time, Oklahoma now has more former smokers than current smokers. Analysis of 2010 adult smoking data indicates Oklahoma has dropped to a new historic low. In 2001, the adult smoking rate in the state was 28.7 percent, dropping to a new low of 23.7 percent in 2010. The overall decrease from 2001 to 2010 is considered a statistically significant decline and represents 100,000 fewer Oklahomans who smoke in 2010. Oklahoma has also noted a decrease in the number of cigarette packs sold, from 108 packs per person in 2001, to 71 packs per person in 2010. “Although Oklahoma has made real progress over the past decade in reducing tobacco’s deadly toll on our state, we still have a long way to go,” said State Health Commissioner Dr. Terry Cline. “The national adult smoking rate is currently 20.6 percent, and if we could achieve the same rate in our state, an additional 100,000 Oklahomans could be living healthier, smokefree lives.”

Read more from the Shawnee News-Star at

Lawmaker studying to be pharmacist opposes pseudoephedrine law

The only pharmaceutical professional in the Oklahoma Legislature has come out against making pseudoephedrine a prescription-only drug. The popular allergy drug is a key ingredient in most of the state’s illegal methamphetamine labs, which has led some lawmakers to call for restricting the sale of the drug in its tablet form. But Rep. David Derby, R-Owasso, said a prescription mandate is unfair to law-abiding Oklahomans who depend on the drug to fight colds and allergies. “I think it’s bad public policy to write a law that only addresses 5 percent of the population while penalizing 95 percent of the population that uses pseudoephedrine for legal purposes,” said Derby said, a former Tulsa police crime lab worker who is in his final year of study at the University of Oklahoma to be a pharmacist. Derby does not work for any pharmacy chain.

Read more from this Tulsa World article at

Office of Juvenile Affairs names new administrators

The Oklahoma Office of Juvenile Affairs has named a new superintendent for its Tecumseh juvenile correctional center as part of a shake-up that followed recent violent disturbances at the institution. Jerry Fry, of Bethel, will serve as the new superintendent of the Central Oklahoma Juvenile Center in Tecumseh, said Gene Christian, executive director of the state Office of Juvenile Affairs. Fry has been serving as a co-director for White Fields, a Canadian County group home that provides care for abused or neglected boys ages 8 to 18 who are in the custody of the state Department of Human Services. Fry is expected to assume his new duties Oct. 24. In another move, Dick Parish was named interim director of institutional programs, the agency said in a news release. Parish now serves as deputy division administrator for the Office of Juvenile Affairs.

Read more from NewsOK at

Quote of the Day

We have reviewed enough of these tax credits so far to know that the controls and safeguards in place are often a joke.
Rep. David Dank

Number of the Day


Number of primary care physicians per 100,000 people in Oklahoma, compared to 120.5 nationally.  Oklahoma ranked 49th in availability of primary care physicians, 2010

Source: America’s Health Rankings

See previous Numbers of the Day here.

Policy Note

Hanging on by a thread: Nearly 2 million jobless workers face premature unemployment insurance cut-off in 2012

It was nearly four years ago that the recession claimed its first victims, yet millions of hard-working families are still facing the toughest job market since the Great Depression. The federal program of extended unemployment insurance, which runs out December 31 st , is the lifeline that sustains these workers and the local businesses hit hardest by the severe economic downturn. Ms. Dawn Deane, who was laid off in late June 2011, is one of the nearly seven million workers now surviving on a modest unemployment check. With more than 20 years of professional experience, a modest home to maintain, and a nine-year-old daughter to support, Ms. Deane and her family now count on her unemployment insurance to sustain themselves while she continues her determined, daily job search. “The unemployment insurance is helping me manage and maintain my mortgage, utilities, and car payments—helping us just barely stay above water,” says Deane. “Without it, I’d just have nothing while I look for new work—not even heat, electricity, or a phone. And if it got cut off, I would fall behind on my mortgage, probably face foreclosure, have my car repossessed, and end up applying for welfare.”

Read more from the National Employment Law Project at

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Gene Perry worked for OK Policy from 2011 to 2019. He is a native Oklahoman and a citizen of the Cherokee Nation. He graduated from the University of Oklahoma with a B.A. in history and an M.A. in journalism.

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