The recently published newspaper columns addressing this year’s budget and tax credits/incentives appear to be written mostly by Democrat legislators. The writers talk at length about big corporate tax breaks in terms that seem to disapprove of their very existence.
Here’s the secret these legislators are not telling you as they make hay this election season: actually it was Democrat-controlled Legislatures who passed all the big corporate tax breaks with the minority caucuses, deliberately choosing to protect those big corporate tax breaks by voting against reducing or eliminating some of these credits this year.
I also read how the budget was rushed through the process this year. In fact, anticipating the shortfall, this budget has been in the works since August and September, 2015. You cannot finalize a budget until you know how much money you have to spend. That’s why we worked diligently this session on lucrative tax credits, incentives and rebates as we strove to find out what our actual revenue would be. When all the legislation went through the process, we came up with a figure of $6,765,186,011 revenue to spend. Only then could we actually put a budget together. Because we are constitutionally bound to have a balanced budget every year, there has to be winners and losers. To give one agency more money meant that we had to take some money away from others.
Let’s address some of the larger tax credits we had prior to this year, like the Quality Jobs Act, Gross Production Tax and zero emission (wind) tax credits that were passed prior to 2004. And let us note that while certain Democrat legislators loudly disparage this year’s budget, it was also Democrat-controlled Legislatures that enacted and voted for the tax credits they now despise.
The Quality Jobs Act (SB 459) passed in 1993 with a House vote of 72 – 27 and a Senate vote of 37 – 7.
House votes were as follows: Ayes: 72 to Nays: 27
AYES: Adair, Anthony, Apple, Bass, Begley, Benson, Beutler, Bonny, Boyd (Betty), Boyd (Laura), Breckinridge, Bryant (James), Caldwell, Cox, Crocker, Culver, Dunegan, Erwin, Fallin, Fields, Glover, Hamilton (James), Hamilton (Jeff), Hefner, Henshaw, Hilliard, Holt, Hutchison, Isaac, Kinnamon, Kirby, Kouba, Langmacher, Larason, Leist, Maddox (Jim), Mass, Matlock, Mccorkell, Monson, Paulk, Phillips, Reese, Rhoads (Karroll), Rhodes (Dusty), Rice, Roach, Roberts, Ross, Sadler, Satterfield, Seikel, Settle, Smith (Bill), Smith (Dale), Steidley, Stites, Stottlemyre, Sullivan, Taylor, Thomas, Thompson, Todd, Tyler, Vaughn (George), Vaughn (Ray), Voskuhl, Weaver, Widener, Williams, York, Mr. Speaker.
NAYS: Bastin, Bryant (John), Campbell, Coleman, Cotner, Cozort, Davis, Dunlap, Ferguson, Gates, Gray, Greenwood, Hager, Johnson (Rob), Key, Lucas, Maddux (Elmer), Mitchell, Monks, Peltier, Pope, Smith (David), Stanley, Thornbrugh, Webb, Weese, Worthen.
Senate votes were as follows: Ayes: 37 to Nays: 7
AYES: Bell, Brown, Cain, Capps, Cullison, Dickerson, Easley, Fisher, Ford, Gustafson, Haney, Harrison, Helton, Hobson, Hooper, Horner, Kerr, Lawler, Leftwich, Littlefield, Long (Ed), Long (Lewis), Mickle, Miles-LaGrange, Muegge, Price, Roberts, Robinson, Rozell, Shedrick, Shurden, Stipe, Taylor, Wilkerson, Williams (Don), Williams (Penny) and Wright.
NAYS: Cole, Douglass, Hendrick, Pierce, Rubottom, Smith and Snyder.
EXCUSED: Fair, Henry, Herbert and Weedn.
State Treasurer Ken Miller published the Oklahoma Economic Report July 31, 2013 addressing in part the Gross Production Tax enacted in 1963. Most of the information below is a direct copy and paste.
Under a Democrat-controlled legislature, the Gross Production Tax was enacted in 1963. The statute has been amended more than two dozen times, including at least once each year since 1999. The most significant amendments were made in 1994 (SB 841) with the passage of drilling incentives intended to stimulate Oklahoma’s energy industry, many of which remain in place today. The two primary incentives created then were for deep and horizontally-drilled wells. For deep wells, the gross production tax was temporarily discounted by three percentage points. For horizontal wells, the tax was reduced temporarily by six percentage points.
Senate Bill 841 received unanimous approval in both the House and Senate in the waning days of the 1994 session. Senate co-authors included Senators Cullison, Shedrick, Long (Ed), Shurden, Fisher, Capps, Henry Harrison, Gustafson, Price and Cole. House co-authors included Representatives Apple, Beutler, Bryant (John), Coleman, Dunlap, Fallin, Ferguson, Greenwood, Hager, Henshaw, Holt, Kinnamon, Kouba, Monks, Reese, Sadler, Smith (Bill), Stites, Sullivan, Vaughn (Ray) and Voskuhl.
The bill’s authors hailed it as a job saver and economic stimulator. Advocates said it would help the state’s energy industry compete for investment dollars with other states that had implemented incentive packages. Among the changes made since 1994 was a doubling of the maximum time for the horizontal drilling incentive.
In 2002, again with unanimous legislative approval, the limit was changed from 24 months to 48 months. SB 947 passed on the Senate side 40 – 0.
Senate votes were as follows:
AYES: Cain, Campbell, Capps, Coffee, Crutchfield, Easley, Fair, Ford, Haney, Harrison, Henry, Herbert, Hobson, Horner, Johnson, Kerr, Laughlin, Maddox, Martin, Mickle, Monson, Morgan, Muegge, Nichols, Price, Pruitt, Rabon, Reynolds, Riley, Robinson, Rozell, Shurden, Smith, Snyder, Stipe, Taylor, Wilcoxson, Wilkerson, Williams and Williamson.
EXCUSED: Douglass, Dunlap, Fisher, Helton, Leftwich, Littlefield and Milacek.
VACANCY: District 4.
SB 947 passed on the House side with a 97 – 0 vote.
House votes were as follows:
AYES: Adkins, Askins, Balkman, Begley, Benge, Benson, Blackburn, Bonny, Braddock, Calvey, Cargill, Case, Claunch, Coleman, Corn, Covey, Cox, Dank, Davis, DeWitt, Dunegan, Easley, Eddins, Ericson, Ervin, Erwin, Ferguson, Friskup, Gilbert, Graves, Gray, Greenwood, Hastings, Hefner, Hiett, Hilliard, Hutchison, Ingmire, Jones, Kirby, Langmacher, Leist, Lindley, Liotta, Maddux, Mass, Matlock, McCarter, Miller (Doug), Miller (Ray), Mitchell, Morgan, Nance, Nations, Newport, O’Neal, Paulk, Perry, Peters, Peterson, Pettigrew, Phillips, Piatt, Plunk, Pope (Clay), Pope (Tim), Rice, Roach, Roan, Roberts, Roggow, Smaligo, Smith (Dale), Smith (Hopper), Staggs, Stanley, Steele, Stites (Chad), Stites (J.T.), Sullivan, Sweeden, Taylor, Tibbs, Toure, Turner, Tyler, Vaughn, Walker, Webb, Wells, Wilson, Wilt, Winchester, Worthen, Wright, Young, Mr. Speaker.
EXCUSED: Deutschendorf, Fields, Glover, Ross.
The Zero-Emission Facilities Production Tax Credit was passed in 2001 (SB 440) with a 98-2 House vote and a 41-0 Senate vote. This bill provided tax credits for production and consumption of zero-emission electric power.
Senate Bill 1451 in 2002 amended the Zero-Emission Facilities Tax Production Credit by allowing tax credits to advanced small wind turbines. That vote passed the House 84 – 14 and the Senate 34 – 4.
House votes were as follows:
AYES: Adkins, Askins, Balkman, Begley, Benge, Benson, Blackburn, Bonny, Braddock, Calvey, Case, Claunch, Coleman, Corn, Covey, Cox, Dank, DeWitt, Dunegan, Easley, Eddins, Erwin, Ferguson, Fields, Friskup, Gilbert, Gray, Greenwood, Hastings, Hefner, Hiett, Hilliard, Hutchison, Ingmire, Jones, Kirby, Langmacher, Leist, Lindley, Liotta, Mass, Matlock, McCarter, Miller (Doug), Miller (Ray), Mitchell, Morgan, Nance, Nations, Newport, O’Neal, Paulk, Perry, Pettigrew, Phillips, Piatt, Plunk, Pope (Clay), Pope (Tim), Rice, Roach, Roan, Roberts, Roggow, Smaligo, Smith (Dale), Smith (Hopper), Staggs, Stanley, Stites (J.T.), Sullivan, Sweeden, Taylor, Tibbs, Toure, Turner, Tyler, Walker, Webb, Wells, Wilson, Winchester, Worthen, Mr. Speaker.
NAYS: Cargill, Davis, Ericson, Ervin, Graves, Maddux, Peters, Peterson, Steele, Stites (Chad), Vaughn, Wilt, Wright, Young.
EXCUSED: Deutschendorf, Glover, Ross.
Senate votes were as follows:
AYES: Cain, Capps, Coffee, Crutchfield, Easley, Fair, Harrison, Helton, Henry, Herbert, Hobson, Homer, Johnson, Kerr, Laughlin, Littlefield, Maddox, Martin, Mickle, Morgan, Muegge, Nichols, Price, Pruitt, Rabon, Reynolds, Robinson, Shurden, Smith, Snyder, Taylor, Wilcoxson, Wilkerson and Williams.
NAYS: Campbell, Dunlap, Ford and Riley.
EXCUSED: Douglass, Fisher, Haney, Leftwich, Milacek, Monson, Rozell, Stipe and Williamson.
VACANCY: District 4.
Let us also remember, as mentioned on my blog in the article Taxing Questions in January 2016, it was Democratic Governor Brad Henry who implemented the two largest tax cuts in state history: $627M in 2006, four times larger than a then-record $150M tax cut plan in 2005. Under that tax relief package, the top income tax rate was decreased from 6.25% to 5.5% over three years, and to 5.25% in the fourth year, if the economy continued to grow.
Senator Mark Allen