Sen. Mazzei tells Incentive Evaluation Commission it’s time to end state’s wind power tax credit

SUBMITTED

Outgoing Senate Finance Chairman Mike Mazzei addressed the Incentive Evaluation Commission Thursday in support of a report that examined the cost versus benefits of the state’s Zero Emission Facility tax credit.  The PFM consulting group determined the cost significantly exceeds the benefits of the program, and recommends that the credit termination date should be accelerated.

In addition to having served as the chair of the Senate Finance Committee, Mazzei is a licensed certified financial planner.  For years he has advocated the need to reduce or end tax credits that have not produced the economic benefits for the state necessary to justify continuing them.  Mazzei said the wind farm credit is a prime example of that.  Under current law, a wind farm must be placed in service before January 1, 2021 in order to claim the credits.  Mazzei said the credit should be discontinued in 2017.

“In 2010, this credit cost Oklahoma $3.7 million, but as of 2015, the cost exceeded $100 million.  The whole goal of any tax incentive should be to generate economic benefits that are greater than the cost.  When you look at the direct economic benefit from the wind power facilities in 2015, it was $78.4 million and produced only $17.1 million in tax revenue,” said Mazzei, R-Tulsa.  “When you take into account the fact that Oklahoma is looking at a budget shortfall of at least $600 million for fiscal year 2017, we clearly cannot afford to wait until 2021.”

Last year, Oklahoma was ranked 3rd in the country for total megawatt hours of 1,423,000.  Mazzei said it was obvious the tax incentives had facilitated a significant amount of wind power facilities and megawatt capacity.  However, in light of the cost versus the benefit, the significant budget constraints facing the state and the many unmet funding needs for core functions, the production tax credit needed to end sooner.

“During the years the cost of this tax credit was skyrocketing, we were reducing education funding.  Since 2009, K-12 funding is down $95 million even though student enrollment is up by 40,000.  We’re now 50th in the nation in teacher pay,” Mazzei said.  “But that’s not all.  Healthcare costs for the state are increasing significantly every year.  We don’t have enough highway patrol officers.  Our prisons are severely understaffed.  We still haven’t caught up on all our deficient roads and bridges.”

Mazzei said the tax credit program also lacks adequate protections such as an annual cap for the program which would limit the annual expense to the state and enable lawmakers to anticipate the exact cost for budgeting purposes.  Furthermore, the report documents that in 2014, 154 corporate interests took advantage of the program.  This enormous corporate welfare is certainly not fair to the other 1.6 million tax filers in Oklahoma who sent their money to the state hoping for good schools, good roads, and good law enforcement.  He also noted the analysis by PFM showed Oklahoma is the only state in the country accepting new wind power facilities.  Mazzei called on the members of the Incentive Evaluation Commission to approve the analysis report by PFM on the Tax Credit for Zero Emission Facilities.

“In addition, I strongly encourage every member of the 2017 legislature to read this report and support legislation to end the wind power tax credit in 2017,” Mazzei said.

Sand Springs Public Schools win lawsuit against Oklahoma Tax Commission

By: Scott Emigh, Editor-in-Chief

The Sand Springs Public School District joined seven other districts in a lawsuit against the Oklahoma Tax Commission earlier this summer, alleging that the Commission was misappropriating funds associated with House Bill 2244. The plaintiffs won their suit Friday.

The School Board initially went straight to the Oklahoma Supreme Court in hopes of enacting a decision before June 30th, but the Court denied the petition in April, sending it back to the district courts. 

Sand Springs claims a loss of nearly $300,000 since the new law concerning motor vehicle tax revenue took effect in July of 2015. The Board was joined by Altus, Ponca City, Muskogee, Mid-Del, Quapaw, Canton and Lone Wolf Public Schools. 

The lawsuit, led by former Sand Springs Public Schools Chief Financial Officer Gary Watts, did not seek reparations for the lost revenue, but demanded that the Commission correct their allocations going forward. 

HB2244 caps the amount of motor vehicle tax money that education receives at 36.2 percent. Previously, Oklahoma law mandated that the schools were to receive the same amount as the previous year, regardless of actual revenue. If revenue dipped one year, the Commission dipped into the State's share of funding to supplement the schools. HB2244 abolished that clause. 

In months where the revenue wasn't high enough to give schools the same amount they received in previous years, the Commission should have decreased allotments equally between all districts based on what they received the previous year. Instead, the Commission dispersed based on average daily attendance.

Oklahoma County District Judge Patricia Parrish sided with the plaintiffs and ordered the OTC to correct future allocations for all schools. 

Sand Springs Board of Education authorizes litigation against State

By: Scott Emigh, Editor-in-Chief

The Sand Springs Board of Education held their regular monthly meeting and used the opportunity to present a series of awards and recognitions, approve the hiring of new staff, and discuss district finances. 

Bob Anderson was awarded the Sandite Spirit Award and Coins of Excellence were presented to retiring Superintendent Lloyd Snow, retiring Chief Financial Operator Gary Watts, retiring Pratt Principal Jim Roberts, retiring Athletic Director Ed Garrett, retiring Encumbrance Clerk Sally Gramm, Board Clerk Kim Clenney, and District Artchitect Jeanie Kvach.

The Board approved the employment of six new employees for the upcoming school year. Clyde Boyd Middle School will be adding Rebekah Anderson as a Seventh Grade Writing Teacher. Charles Page High School will get five new employees: Kristen Anderson, Special Ed Teacher; Matthew Miller, World History Teacher; Kimberly Mutch, Advanced Math Teacher; Lindsay Ross, Counselor; Matt Solomon, Art Teacher. 

The school board unanimously approved a motion to authorize funding of no more than $5,000 for the purpose of joining ongoing litigation before the Oklahoma Supreme Court against the State Department of Education and the Oklahoma Tax Commission concerning past allocations of state aid payments. The lawsuit, which was filed in March, includes about fifty school districts seeking reparations for twenty-two years of misappropriation of commercial and agricultural property taxes. The defense maintains that despite their acknowledgement and correction of the error in 2014, they should not be made to collect reparations from the schools that benefited due to the unreliability of data predating 2004 due to the fact that all records used in the calculation of state aid are disposed of after twelve years. Furthermore, they cite a three-year statute of limitations on similar cases. The defense issued a response to the petitioners' claims on June 1st, pointing out "the dire budget situations already facing the schools that will be negatively impacted."

The district is already engaged in litigation against the Oklahoma Tax Commission for allegedly misappropriating funds associated with motor vehicle collections authorized by the passage of HB2244 by the 55th Legislature. The plaintiff is not seeking reparations from the school districts that benefited from the alleged error, but seeks for the state aid formula to be corrected going forward. The board initially went straight to the State Supreme Court in the hopes of enacting a decision before June 30th. The Supreme Court denied the petition in April, however, meaning the suit will have to go through the district courts first. The district claims a loss of more than $200,000 thus far and expects that amount to double by the time a decision is reached. 

The proposed budget for 2016-2017 was also unanimously approved during the board meeting. Revenue is expected to decline by $3,761,380 from the last fiscal year. Operating expenses have been slashed by $3,094,000, which Superintendent Snow says will result in fifty-one fewer employees across the school district.