Senate Finance Committee Begins Search for ‘Ineffective, Obsolete’ Tax Incentives

Co-Chair Mazzei Discusses Legislation to ‘Sunset’ Most Tax Incentives, Proposes Criteria for Future Tax Breaks

The State Senate Finance Committee began a review of Oklahoma’s tax incentives on Tuesday, hearing testimony from Dr. James Wilbanks, chairman of the state Incentive Review Committee.

Wilbanks discussed his committee’s work, and their proposed criteria for evaluating the effectiveness of tax incentives.

Finance Committee Co-Chairman Mike Mazzei said he wants the tax incentive review to be a bipartisan effort.

Senate Republicans hope to identify obsolete or ineffective special interest tax breaks that can be eliminated to free up money to reduce the state income tax.

“There are more than $1 billion in special tax incentives currently on the books in Oklahoma, and reviewing them will be an ongoing process” stated Sen. Mike Mazzei, co-chairman of the Finance Committee. “If we can find tax breaks that don’t benefit the state or that have become out-dated, we can use that money instead to help grow the economy by reducing taxes on income and investments.”

State Senator Cliff Aldridge, a member of the Senate Finance Committee, agreed.

“We have a lot of tax incentives in Oklahoma, so it is important for the Legislature to make sure they are working as planned,” said Aldridge, R-Choctaw. “The majority of tax incentives are probably helpful to our state and our citizens, but we need to identify the ones that are ineffective or obsolete and eliminate them.”

Mazzei, R-Tulsa, also talked to committee members about his legislation to “sunset” most existing tax incentives. Senate Bill 2024 would set an expiration date for tax credits and sales tax exemptions. Mazzei’s bill would not affect tax breaks aimed at helping senior citizens, veterans, the indigent, or the disabled.

“By placing sunset dates for special tax breaks, it will require the Legislature to conduct regular reviews to ensure these have worked as advertised,” Mazzei said. “If they are, we can renew them. If not, we can let them expire and put the money to better use.”

Mazzei proposed that future proposals for tax incentives meet strict criteria before being approved by the Legislature to ensure they are broad-based and will improve the economy.

“We’re taking a hard look at tax incentives already on the books, so it only makes sense that we should give proposals for new tax breaks the same level of scrutiny,” Mazzei said. “New tax incentives should meet a strict set of criteria to ensure they will help our state meet our long-term economic goals.”