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Capitol Insider: What To Do About Oklahoma's Economic Incentives?

Dec 7, 2018

As the state budget started shrinking, Oklahoma lawmakers began debating the value of economic incentives, such as tax credits for wind turbines. How do we know if an incentive is worth its cost? KGOU’s Dick Pryor and eCapitol’s Shawn Ashley spoke with Lyle Roggow, the person in charge of telling the legislature which incentives should stay and which should go.

  FULL TRANSCRIPT:

Dick Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics, policy and elections. I'm Dick Pryor with eCapitol News Director Shawn Ashley. One of the most debated issues during the last several years at the state legislature, especially as state government has tried to cut spending, has been incentives provided by the state to encourage economic development. Lyle Roggow is chairman of the OklahomaIincentive Evaluation Commission and he joins us today. Lyle, welcome.

Lyle Roggow: Thank you very much.

Shawn Ashley: Lyle, there's been a lot of talk about the high cost of incentives, but not much action dating back for several years. In 2016 the legislature created the commission that you chair. What does the commission do?.

Roggow: Well, first off, we examine and look at each and every one of the incentives that the state offers. Where are these incentives going? Who's getting them? What is the economic benefit or what is it costing us, OK? As as taxpayers... I mean, as long as we have a growing thriving economy things seem to be OK. But when you go through those down cycles everybody wants to review and look at things.

Pryor: When the late state Representative David Dank of Oklahoma City began looking at incentives the price to the state was several billion dollars. That was a few years ago. The commission arose from his interest in thoroughly evaluating tax credits and exemptions. So is this strictly a cost benefit analysis? How do you really do the evaluation?

Roggow: You know and it really takes in lots of things. There's one part of this where you have your public input session, OK, where the public gets to come and speak on behalf of a certain incentive that may be reviewed. Now we've received the document, the recommendations from our consultant. We've read those, but you know, at the same time, there may be some things that are missed in that document, you know, that you don't understand the impact of. And so when you look at that all and all you have to make some decisions as to OK you have the public input you have the documentation. But we've tried to be very open and transparent. I mean, the nice thing and I continue to brag about this...Every single thing that we have done are looked at winds up on our website. So we want individuals to know that what we're done and it's you if you want to read all the reports are out there.

Ashley: One of the constant themes in this year's report, and it was there in 2017 and '16 as well, as the need for additional data to thoroughly... To more thoroughly review the these incentives.

Roggow: Yeah. And I think that no one really is keeping the data to the fullest degree that we really need it. The Tax Commission whose were most of these things are. Data still is not as easy to get. They have to go through and scrub it. It takes our consultant, you know, eight, nine, ten months to get the all the required data that they need, because it's just not easily accessible.

Pryor: Once the commission has voted to reconfigure or repeal an incentive what is required then to implement the commission's action?

Roggow: Well that takes legislative action. One that I saw the elected officials take up real quick was the zero wind, or zero emissions, which is your wind turbines. I mean, when that was was first initiated we were price that maybe maybe eight, nine, ten percent renewable energy in our grid, and our goal...Remember Oklahoma said, OK we want a goal: by 2015 we want us to get the 15 percent. Well today we're sitting at about twenty, twenty-two percent renewable from wind, OK? And you know when we start to look at these incentives, sometimes an incentive you know has a very positive impact on the geographic area, you know, such as your school districts in any kind government on the wind turbines. Very, very positive because in some locations that is the largest you know pay or property taxes. But what happened is the state was actually paying, you know, for that cost and not really getting as big of a benefit, you know, from that. And I'll send that excelled up to maybe 60 or 70 million dollars, so we said, hey the recommendation from the consult was put a cap on it. What did the legislature do? They ended the program, but you know they staayed to their commitment by saying I will honor and pay out for the next ten years those projects that were done.

Pryor: Lyle Rogow, Chair of the Oklahoma Incentives Evaluation Commission, thanks for joining us.

Roggow: Thank you very much. Enjoyed it!

Pryor: That's Capitol Insider. If you have questions, e-mail us at news@kgou.org or contact us on Twitter: @kgounews. You can also find us online at kgou.org and ecapitol.net. Until next time, with Shawn Ashley, I'm Dick Pryor.

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