Printed from the Urban Tulsa Weekly website: http://www.urbantulsa.com

POSTED ON FEBRUARY 20, 2013:

Chamber Danger

Special interests fight to keep useless tax incentives

By Arnold Hamilton

The next time you hear members of the Oklahoma Legislature prattle on about tax reform and tax fairness, remember this: They aren't really serious -- not enough of them, anyway.

If they were, Rep. David Dank's years of hard work on tax credits, exemptions, and incentives wouldn't have gone down in flames the second week of the session.

Dank has worked his heart out to eliminate those breaks that aren't effective or productive -- in other words, those that are a legalized looting of the state treasury by special interests.

But every time Dank has attempted to persuade his legislative colleagues to take a serious, systematic look at these giveaways, he's met serious resistance.

Call it Exhibit A in the case against big money in politics. Special interests pour millions of dollars into legislative campaigns and wining-and-dining those who are elected. It buys access. It buys influence.

And it puts the fear of God into elected officials -- they don't want those deep-pocketed campaign contributors to suddenly shift their financial loyalties to political opponents.

It could be dangerous to one's political health.

"I guess what bothers me so much," Dank said, "is I think the Washington, D.C. mentality has crept into the states. Some other legislators I talk to are experiencing the same kind of problems in their states."

"The lobbyists are dictating the terms. It's a sad state of affairs," he added.

You may regard all this as inside baseball that doesn't really affect you. Think again.

Oklahoma has roughly $2 billion in tax breaks, credits and incentives on the books (total state budget: $7 billion). Two billion of your tax dollars that could be spent instead on vital, core state services: Education. Roads and bridges. Public safety and corrections. Mental health.

Dank headed a task force in 2011 that studied the matter, but his reforms -- including elimination of transferable tax credits, a shady practice that costs the state $30 million a year -- were rebuffed in the 2012 session.

He returned this year with a different plan: He targeted 32 tax credits for elimination in 2014, unless lawmakers could find reason to continue them.

A House revenue and taxation subcommittee quickly turned thumbs down on the idea. In fact, the vote wasn't even close: 10-3.

Here's why: Almost every one of these tax breaks has a well-financed or well-organized (or both) constituency. Special interests are loath to crack the door open to any scrutiny, fearing their beloved -- and financially rewarding -- programs could end up on the chopping block.

Dank's strategy was simple: Establish criteria that would enable lawmakers to "analyze and determine the cost-benefit" of the tax credit's credits scheduled for elimination.

"I'm doing everything I can," Dank said. "I'm bending over backwards to be fair and get handle on these. I'm interested in pretty much the ones that are costing taxpayers a lot of money for nothing."

Dank insisted he wants to "sit down and have a meaningful discussion with [the] oil and gas [industry]. I want to keep the jobs that Devon, Chesapeake, Continental, Sandrige and others create in Oklahoma. But I don't want to give [multinationals like] Shell the same credits" when they primarily benefit out-of-state shareholders.

With the subcommittee's action, unfortunately, the state still careens down a preposterous path in which corporate interests feast at the taxpayers' trough -- effectively guaranteeing profits and socializing losses.

Seriously bad public policy, especially when considering that Gov. Mary Fallin and legislative Republicans insist that more state income tax cuts are possible.

Oklahoma's core public services have taken significant hits in recent years, because of nearly $1 billion in previous income tax cuts and a worldwide recession that slowed economic growth.

As a result, state prisons are at 99 percent capacity, but only 75 percent of staffing levels -- a recipe for disaster. School programs are being cut, teachers laid off, and classrooms are despicably overcrowded. Long waiting lists are common for mental health services and roads and bridges rank among the nation's worst.

Yet Fallin wants to drop the tax income rate another .25 percent, costing state coffers that finance these vital programs more than $100 million. Other GOP lawmakers want to cut even more.

Dank, a conservative to his ingrown toenails, wants to cut the income tax, too. But he at least resides in the reality-based world that recognizes you can't continue to cut income taxes, give away hundreds of millions of dollars in corporate welfare and still fund vital state services at plausible levels.

In fact, Dank believes that if the GOP's -- and his -- goal of significantly cutting the state income tax is to be achieved, it must be done in concert with a serious pruning of unnecessary tax credits, exemptions and incentives.

What's head-scratching about this scrutiny-free corporate welfare is that there would appear to be enough votes in the Legislature, from both sides of the aisle, to force a serious discussion on the issue.

"It's really resonating with the general public," says Dank, who figures some ambitious, smart, young lawmaker will realize the electoral potential in pursuing such a good government, good public policy issue.

"They could carve themselves out a career doing that."

Yet, for some reason, no individual lawmaker -- and no coalition -- has emerged.

Most of the Tea Party-types I know are not the State Chamber's automatons. Indeed, they're suspicious of the silk-stocking corporatists that set much of the state's agenda. They feel a much closer kinship to the working class. Wouldn't they be licking their chops to stop corporate welfare?

And what about the Democrats? They're the champions of the working class and the poor, right? Their legislative numbers are small -- less than a third of the seats in both houses. But put 29 House Democrats together with dozens of Republicans who don't automatically toe the corporatist line and real change could be achieved.

Despite the setback in subcommittee, Dank insisted he's not giving up the fight. He's weighing several new lines of attack, including legal challenges to some of the tax credits or circulating an initiative petition -- "just going to the people and putting pressure on some of these legislators."

Dank conceded, however, it's a fight that may outlive his days at the Capitol. He isn't term-limited until 2018, but he is 74 years old.

"My days," he said, "have come and gone ... [but] I can't give up on it. There's too much at stake."

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