Oklahoma legislators approve 3 new tax breaks

OKLAHOMA CITY (AP) -- While Republican legislators in Oklahoma continue wrangling over how to scale back costly tax credits, lawmakers approved three new tax breaks on Wednesday for tickets to sporting events, construction of affordable homes and the purchase of helicopters.

All three bills were approved Wednesday by the House Appropriations and Budget Committee, including one for the purchase of helicopters that narrowly failed in the same committee just last week.

Rep. Charles Ortega, R-Altus, said the tax credit is designed to show state support for a helicopter training facility opening in southwest Oklahoma, even though he acknowledged the facility already is planning to open without the credit.

A fiscal analysis of the proposed tax credit shows it will cost the state about $1 million in the upcoming fiscal year, and an additional $535,000 in fiscal year 2015.

The credit applies to the purchase of rotary-winged aircraft used exclusively for training.

The issue of tax credits, exemptions and rebates — known collectively as tax expenditures — has been a thorny one for legislators who have considered ways to eliminate or overhaul them for the last several years to shore up the state budget or pay for a Republican-backed income tax cut.

"It's just totally absurd," said Rep. David Dank, R-Oklahoma City, a longtime critic of many tax credits offered by the state. A bill by Dank to require additional scrutiny of tax credits was recently scuttled in a Senate committee. "The truth of the matter is the Legislature out here is responsible to the lobbyists and special interests, not the taxpayers.

"It's sinful, and I just hate it."

Gov. Mary Fallin's ambitious tax cut proposal last year began to fall apart when lawmakers balked at eliminating some of the tax exemptions and credits used to help pay for the lost revenue. This year, Fallin's simpler proposal for a one-quarter of 1 percent cut in the state's top income tax rate was gutted in the Senate and replaced with a new approach that ends the transferability of five separate tax credits for coal mining, wind power, rehabilitation of historic buildings, energy-efficient home construction and railroad modernization.

Tax expenditures offered as incentives to businesses often cost the state millions of dollars in lost revenue, but are fiercely protected by teams of lobbyists who fight to keep them in place.

The other tax breaks approved in Wednesday's budget committee include one to offer a tax credit for the manufacturing of federally qualified affordable housing and another to modify the sales tax exemption on tickets and hospitality packages for certain championship sporting events.

The author of the housing proposal, Sen. Bryce Marlatt, said his goal is to encourage economic development and the construction of affordable housing in rural Oklahoma and that the credits would cost the state about $9 million annually.

"But if you look at sales tax revenue, the jobs that are created, and the addition of (property) tax revenue, it's a net gain for the state," said Marlatt, R-Woodward.

Sen. Clark Jolley, R-Edmond, said the goal of his bill to exempt certain ticket sales so that the Oak Tree Country Club in Oklahoma City would qualify for the exemption as a way of luring PGA Tour events to the city.

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Sean Murphy can be reached at www.twitter.com/apseanmurphy