The Senate Finance committee on Tuesday approved two proposals that would establish a process for measuring the effectiveness of economic incentives. Authored by Senate President Pro Tempore Brian Bingman, the legislation would create a system to provide regular, independent evaluations of incentives to determine which are working and which are not.
“Economic incentives have been a critical component of our economic growth in recent years,” said Bingman, R-Sapulpa. “While we need to preserve effective credits, we need a system to help us determine which incentives are not giving us a return on our investment. This legislation would establish a system to provide us with the data we need to make fiscally sound decisions on tax credits.”
Senate Bill 815 requires the development of review criteria to determine the fiscal impact of incentives, assess whether incentives are achieving goals, and make recommendations regarding whether incentives should be changed, modified or repealed. Under the measure, the Legislature would be provided with a report on incentives every December.
Senate Bill 806 would require that any economic incentive include a measurable goal or goals when enacted.
Sen. Rick Brinkley, who presented the proposals on behalf of Pro Tem Bingman, said it was vital for the state to establish a system that can regularly provide lawmakers with accurate information on the results of tax incentives.
“The state currently provides more than $1.7 billion in economic incentives each year,” said Brinkley, R-Owasso. “Many of these incentives have made our state a more attractive option for business and industry. We need a system that can help us connect our economic development policy to reliable data, and identify credits that work effectively for businesses and those that do not.”
Senate Bills 815 and 806 now advance to the full Senate.