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Corporate tax is big loser for Oklahoma in May

"Conventional wisdom says general revenue collections should rebound when oil stabilizes, but the reality is any rebound will be significantly hamstrung by wind incentives without legislative action. The revenue erosion wind incentives caused in May will be the new normal for years unless legislators act," Doerflinger said.

Oklahoma income tax refunds to wind power and other corporations exceeded what those businesses paid in income taxes last month, the Office of Management and Enterprise Services reported Tuesday.

"The month of May saw multiple tax streams sucked dry by low oil prices and another blown away by wind incentives," state Finance Secretary Preston Doerflinger said.

"The state paid more to wind companies in May than the general fund netted from all other corporate income taxpayers combined. How messed up is that?"

May general revenue fund collections of $377.2 million were $58 million, or 13.3 percent, below the official estimate on which the current state budget was based and $25.5 million, or 6.3 percent, below last year's collections.

"Conventional wisdom says general revenue collections should rebound when oil stabilizes, but the reality is any rebound will be significantly hamstrung by wind incentives without legislative action. The revenue erosion wind incentives caused in May will be the new normal for years unless legislators act," Doerflinger said.

Legislators considered but made no headway in reducing wind industry tax incentives in the just ended legislative session.

Jeff Clark, executive director of The Wind Coalition, an industry trade group, criticized Doerflinger in a statement for singling out wind incentives and said all of the state tax breaks offered to the industry are set to expire in 2020.

"The incentives for wind energy development were needed when the industry was starting out and they worked, with great benefit for the state," Clark said.

“We're building a diverse, cleaner, cheaper, modern power generation fleet, and Oklahoma is perfectly positioned to lead and prosper from it.”

The Tax Commission projects the outstanding financial liability of the zero-emission tax credit now exceeds $900 million over the next 15 years, making it one of the state's largest outstanding financial liabilities.

This is the fourth time this fiscal year that the general revenue fund received no corporate income tax collections.

May corporate income tax refunds of $14.8 million exceeded gross corporate income tax collections of $9.8 million. To offset the difference, $5 million was borrowed from personal income tax collections to help pay corporate income tax refunds, including $3.3 million in zero-emission tax incentive payments to wind energy producers.

Sales tax collections in May were $26.7 million, or 15.2 percent, below the estimate and $11.4 million, or 7.1 percent, below the prior year, signaling continued consumer spending reductions as the energy sector has slowed during the oil price downturn.


Source: http://newsok.com/article/5...

JUN 15 2016
http://www.windaction.org/posts/45221-corporate-tax-is-big-loser-for-oklahoma-in-may
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