OKLAHOMA CITY (October 12, 2011) – State Rep. Mike Reynolds said a new report just released by the Oklahoma Tax Commission shows that two major state tax programs probably make the architects of the Solyndra scandal proud.
According to the legislatively-mandated report, the programs cost more than $550,000 per job, while the now well-documented Solyndra scandal cost only $486,000 per job, Reynolds noted.
“This is just more proof that the government should not try to pick winners and losers in the marketplace,” said Reynolds, R-Oklahoma City. “The track record of government officials displays why legislators, other government officials, and employees in the various departments who make the decisions to give away this money aren’t in the private sector. This money should have been used for roads, schools, or constitutional incentives like across-the-board tax cuts.”
The Oklahoma Tax Commission report released this week examined the 2009 impact of the state’s Small Business Capital Formation Incentive Act as well as the Rural Venture Capital Formation Incentive Act. Reynolds has been a critic of these “giveaway” programs for several years.
Reynolds noted that legislation was previously passed requiring at least some level of accountability, but said even that reform was “watered-down.”
The Small Business Capital Formation Incentive Act provides up to a 30 percent tax credit of qualified investments made in certain small business capital companies or investments made “in conjunction” with those ventures.
The Tax Commission report found that of $158 million in total tax credits generated through the program in 2008 and 2009, only $41 million has currently been claimed, leaving at least $117 million in potential revenue reductions for the next budget year. Of the 99 total jobs created by the program, over half were at the Patriot Golf Course, a private golf course in the Tulsa area.
What is even more disturbing, according to Reynolds, is that an attorney general’s opinion issued on Dec. 20, 2010 made it clear that the programs are unconstitutional.
“I could say it is shocking that no legislation was introduced in the last session to fix this fraud, but it's not. A significant number of the members of the Legislature introduce bills to expand these giveaway programs, and it took a majority to pass the original bills. I have introduced bills and amendments on numerous occasions during the past several years. This legislation ranged from elimination of these types of programs to comprehensive disclosure that would allow the Legislature and the public to determine how badly the programs are failing. These measures have never been allowed a vote on the floor of the House.
Oklahoma families should not have to see their hard-earned tax dollars wasted in this way. No one can rationally justify maintaining these expensive, wasteful, unconstitutional programs and I intend to reintroduce legislation during the upcoming session to see that it stops,” Reynolds concluded.