Rep. Gann warns against corporate welfare on steroids following CANOO bankruptcy

Gann Warns Against Corporate Welfare on Steroids Following CANOO Bankruptcy

OKLAHOMA CITY (Jan. 21st) – Rep. Tom Gann, R-Inola,  an opponent of corporate welfare, today issued a stark warning regarding the ongoing misuse of public funds.

"Corporate welfare is when the government takes the public's money to manipulate the economy, choosing winners and losers in the free market," Gann said. "In recent years, this practice has intensified, creating an era of corporate welfare on steroids, as Oklahoma government has pushed massive green-energy giveaways that align more with a liberal agenda than Oklahoma's conservative values."

Gann pointed to last week's bankruptcy of the high-profile, green-energy, electric vehicle startup, CANOO, as a prime example of why government must stop interfering in the free market. Canoo's manufacturing plant in Pryor is in Gann's House district.

1889 Institute: How to put an end to Corporate Welfare

HOW TO PUT AN END TO CORPORATE WELFARE

States can join together in compact to stop corporate handouts.

OKLAHOMA CITY, OK (April 3, 2019) – Government support for businesses through subsidies and other special treatment, commonly referred to as corporate welfare, has proven time and again to be an ineffective use of taxpayer dollars. But the practice persists, with policymakers claiming they cannot give up these “tools” to compete with other states for business development. “Multilateral Disarmament: A State Compact to End Corporate Welfare,” a study published by the Mackinac Center for Public Policy and 1889 Institute, proposes a solution to this “collective action” problem and shows how states can join together to end corporate handouts once and for all.

The complexity of state tax systems make it challenging to pinpoint exactly what corporate welfare is. This study takes care to define it properly, describing it as “any financial benefit purposely granted by government to a specific business or class of business and that is not generally available to all businesses and taxpayers.” The most common types of corporate welfare are also identified, as well as what should not be considered corporate welfare. These definitions are important so as not to confuse good tax policy with harmful corporate welfare.

“Government favors for big corporations, whether through outright grants or tax privileges, are an economic drag; calling this ‘economic development’ in a country as developed as the U.S. is utter nonsense,” said Byron Schlomach, director of the 1889 Institute and one of the study’s three authors.

The study also ranks the states by the amount of corporate welfare they hand out. The states with the most corporate welfare, as measured as a percent of state GDP, are Alaska, Kentucky, Louisiana, Michigan and Hawaii. Oklahoma ranks 9th among the states in the percentage of its state GDP handed out as corporate welfare, a dubious position to be in, but nevertheless, already in the top 10.

An important element of the study is a proposed state “cease-fire” agreement, a compact which states would join and agree together not to offer corporate handouts. The compact would go into effect once a certain number of states signed on. This helps mitigate the collective action problem of states not wanting to “jump first” to ban corporate handouts for fear that they’d surrender their competitive edge to other states. If states would join together, it is possible that corporate welfare could be eliminated altogether.

“Instead of competing for the best quality of life and business climate, lawmakers use corporate welfare as a shortcut to make it look like their state is doing well. Our compact gets states to work together to compete on the things that matter to residents in lieu of their race to hand out the most taxpayer money to select companies,” said James Hohman, director of fiscal policy at the Mackinac Center and co-author of the study.

About the 1889 Institute 
The 1889 Institute is an Oklahoma think tank committed to independent, principled state policy fostering limited and responsible government, free enterprise and a robust civil society. The publication, “Multilateral Disarmament: A State Compact to End Corporate Welfare” can be found on the nonprofit’s website at https://1889institute.org/corporate-welfare-1.

OCPA column: The Slippery Three

The Slippery Three

by Jonathan Small, president of the Oklahoma Council of Public Affairs (OCPA)

Since 2015, annual taxes and other revenue taken from Oklahomans have increased by $1.1 billion. Oklahomans’ personal income taxes are up at least $185 million annually just since 2016.

Some important reforms passed this session, including enrollment audits and work requirements for Oklahoma’s expensive Medicaid program. Yet other programs proved just how slippery is the status quo when it comes to avoiding common-sense cost savings.

Oklahoma’s film industry handout is one example. The program is an actual welfare payment to cover costs for a favored business. Some of these films are never released. Others paint Oklahoma in a bad light. Perhaps the most prominent subsidized film, August: Osage County, was made by disgraced Hollywood producer Harvey Weinstein. Because of this program, Oklahomans gave Weinstein’s company $4.6 million.

Oklahoma’s Incentive Evaluation Commission found “no evidence that the Oklahoma film industry has strengthened during the time period when the rebate has been available.” The current rebate each year is $4 million, which could pay for nursing home care for 213 elderly Oklahomans or for mental health services for 1,402 Oklahomans.

A far more expensive outpost of cronyism is Oklahoma’s rebates to the wind industry. We actually pay the wind industry to come to Oklahoma and export energy generated right out of the state. Oklahoma paid out more than $70 million to Big Wind in fiscal year 2017.

The subsidies are such a sweetheart deal that the wind industry will do anything and everything to keep them–like paying for more than 40 lobbyists to lay siege on the state Capitol or apparently stalking lawmakers who oppose them. Eliminating wind subsidies would save, by conservative estimates, $70 million annually.

Finally, Oklahoma’s Tobacco Settlement Endowment Trust (TSET) offers the perfect example of mission creep. TSET grows by about $50 million every year and spends around $30 million to $40 million in earnings from its billion-dollar endowment. Its largesse has grown to the point that, in addition to some important objectives, TSET has spent $1.1 million promoting smoke-free bars and nightclubs and more than $700,000 on billboards for “water recipes.” Just capping TSET’s current endowment would give the state about $53 million in new revenues every year.

Common-sense changes to these three slippery programs could have freed up more than $125 million annually for higher priorities. But they slipped away.

Perhaps next year, legislators will finally reform these wasteful programs. Every dollar spent wastefully by these programs is a dollar that could be better used on health care for our most vulnerable and public education, including teacher pay and classroom supplies.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.

Column: Cut Wind Waste to fund Education

Here's an article I received that discusses an option to help fund education spending:

While some are asking where money can be found to fund core government needs in Oklahoma...ONE SIMPLE ANSWER is ending corporate welfare to the Corporate Wind Industry!!!!   If we don't do something truly meaningful this session ...another 70 million dollars is going to LITERALLY....be...Gone with the Wind ....and that 70 million could have gone instead to meet true Oklahoma classroom needs, etc.

We must not allow our legislators to say they "we will think about that tomorrow" ...next session or next week... concerning the corporate welfare payments made to wind...at a rate of 70 million per year AND ADDING UP TO $500-$750 MILLION in total payout TO WIND COMPANIES OVER THE NEXT TEN YEARS (ACCORDING TO TAX COMMISSION). We cannot delay in addressing this especially when more tax increases on working families continue to be discussed.  The time to stop corporate welfare payments to BIG wind is now...before working families are asked to pay more.

There is a limited opportunity while teachers are at the capitol to overtake the influence of the approximately 50 industrial wind lobbyists who are being paid to convince legislators to continue  the annual payment of 70 million dollars per year after the state has already ZEROED OUT their ENTIRE income tax liability. The wind industry does not pay a dime in income taxes. Additionally, after they don't pay a dime in income taxes... then the taxpayer's money (taken from you and me)... is used to cut them a 70 million dollar check in the mail...and that 70 million is likely to be 75 million, next year.

Oklahoma currently ranks #2 in wind power generation and that is because Oklahoma has the wind... not because of the tax credit.  Don't buy the paid for sales pitch that the industry won't continue to locate here... if not subsidized.  Oklahoma after all is where the wind comes sweeping down the plains!!!

THE SHENANIGANS OF THIS CORPORATE WELFARE PAYMENT WAS EXPOSED ON THE SENATE FLOOR LAST FRIDAY... the entire SENATE debate from Friday can be found here.

Once that link/site comes up (you will see a video on screen... so tap the triangle shaped play button)....then scroll the full 2 hour video length to the 1 hour and 17 minute mark ...to see the start of wind reform Amendment  proposed...YOU WILL SEE SOMETHING UNIQUE IN THAT DEBATE AS THE CORRUPTION OF PROTECTING SPECIAL INTEREST AT TAXPAYER EXPENSE IS EXPOSED... and "The Man Behind the Curtain" IS EXPOSED!!!    At 1 hour and 41 minutes the audio freezes...but if you will scroll to 1 hour and 56 minutes...it continues and goes until 2 hours and 5 minutes. If you scroll to exactly the 3 hour mark...you will find closing debate by Senator author of amendment.

ACTION PLAN...WHAT NOW....

This coming Monday... SB888 by Brecheen will be heard in the House...in committee...at 4 pm in the House Appropriations and Budget committee.  It’s a similar attempt as to what was tried on the Senate floor Friday...(see video link).....true attempt at  meaningful wind reform (not a soft cap of the 70 million annual corporate welfare payment...but full elimination of payout).  The amendment to eliminate the wind corporate welfare payment will be added to SB888 by Rep. Coody.  The amendment is germane to the current bill and would eliminate the 70 million dollar annual refundable tax credit given to wind industry....after the industry is allowed, by our state legislators, to not pay a dime in income taxes.  Oklahomans must contact the committee members who will vote Monday...and encourage them to "vote for the amendment to be added to the bill eliminating the corporate welfare wind payment." Click here for that committee membership...so you can contact certain legislators on that committee...before the vote at 4 pm this Monday, April 9th.

ALSO ...DON'T BE FOOLED by legislators.  ..Educate yourself on tax credit wind terminology by reading the below!!!

THE OKLAHOMAN NEWSPAPER HAS REPORTED THIS WEEKEND...THAT HOUSE LEADERSHIP may put wind reform up for a vote this coming week… after pressure has been building...HOWEVER..... WATCH FOR THE WORDS "SOFT CAP" AND "CARRY FORWARD."

The taxpayers need to be wary of the tricks, as the discussions continue. What types of wind reform are allowed by leadership and “those behind the curtain” (see Wizard of Oz video clip…) to come to the House or Senate floor matters.   What looks like real wind reform is most likely to be a slight of hand trick disguised as protection for the taxpayer UNLESS the taxpayer and teachers are up to SPEED.....wind speed.

#1...After 16 years of corporate welfare payments to big wind there is no excuse to not end the refundable tax credit in totality ...the 70 million dollar check in the mailbox should be stopped...all 70 million.  That is the right solution and the fairest to the taxpayer after 16 years of PAYOUT. Ending the refundability characteristic is what WILL accomplish this. The word “refund" is a bit misleading.  It's called refundability but it's not refunding something the WIND COMPANIES payed out....it’s refunding the value of the credit they earned for every kilo-watt hour of electricity produced. They didn't pay a dollar in income taxes. They still get their income tax liability ZEROED out by ending refundability...but that is it...no more checks in the mail, while taxpayers are having their taxes raised in this climate.

#2... Some want to discuss caps but be LEERY of discussions on capping the 70 million per year payout.  Capping the payout can be done in multiple ways and the easy way for the magicians to confuse the public is to place what is called a "soft cap" with "carry forward" on the 70 million dollar payout.   If you hear the word "soft cap" or "carry forward" then the taxpayers are getting duped once again.  A soft cap means they cap the payout.... to say 35 million.... HOWEVER... the 35 million they don't pay out ...totaling the 70 million they would otherwise pay out  (absent the 35 million dollar soft cap) is going to be allowed to be carried forward and payed out fully ... just in later years.  THE TAXPAYER STILL HAS TO PAY THE FULL AMOUNT WITH A SOFT CAP.  A soft cap just means big wind still gets the full corporate welfare payment ...they just have to wait longer to receive it. Oklahomans must demand the discussion on "soft caps" or "carry forward" provisions in this deal be exposed/banned from being accepted as the true solution.   If your legislators are going to do meaningful reform...say no to "soft caps" and "carry forward" payments in years in the future.

#3 The one type of cap to the payout you can count on to be transparent and easily understood  is called a hard cap... a hard cap means that they are truly limited to the announced dollar figure of the cap...no tricks...no carry forward payments in future years.  If 10 million is the hard cap...then all wind industries turning in their tax credits to the state totaling 70 million...would only get a proportionate share of their credit. It would be worth just a percentage of its original claimed value. For example, a 10 million dollar cap would save the Tax payers a minimum of 60 million annually.  Those wind companies sharing the 10 million dollar check in the mail would only get a proportionate share of the 10 million...and that's it. 

The Conservative View: Mirror, Mirror On The Wall

This week's Conservative View, by Adair County Commissioner and conservative activist Russell Turner (R-Stilwell).

The Conservative View
by Russell Turner

Mirror, Mirror On The Wall

All of us, at one time or another, has heard the nursery rhyme about the woman who looked into the magic mirror and asked who was the fairest of them all. We Americans have gotten into a bad habit of patting ourselves on the back and have cultured the belief that we can forget our founding principles and still expect to be the most prosperous nation that the world has ever seen. We Americans love to gripe and moan about how corrupt our government has become, but we fail to link our behavior to those of our elected officials.

How blind we are to the fact that our elected officials and our government are merely a reflection of how we the citizens conduct ourselves. Our forefathers were people who had pride in their ability to be self reliant and self sufficient. Today we have a host of politicians who promise anything and everything to bribe the voters to elect them into office. I can remember a time when it was an insult to someone if there was a suggestion that they should ask for a government handout. Today too many people are only concerned that they get their share. We Americans have been infected by a disease called entitlement. Even those who contribute nothing to our society have been conditioned to believe that they should get their “fair share” and they don’t care that someone else has done the work necessary to earn the things they want a part of.

We have allowed ourselves to be manipulated into believing that someone is greedy who wants to keep what they have earned. We have allowed ourselves to believe in class envy and to covet the possessions of the ones who worked for them. Whether we want to admit it or not, we have been trained like a dog performing for its supper. Far too many Americans look at the political candidates and ask what they can do for them today. We sit back like a puppy waiting for the next doggy treat. It is a fact that we all have to survive, but we Americans have degraded ourselves into a people that lack the vision to remain a great nation.

Before we label someone as greedy, remember that the true greedy person is the one who does not contribute but wants a share of someone else’s labor. During this election season we need to reflect upon what we have become, the next time we look into the mirror we may not like what we see.  

If you wish to contact Russell Turner, or want to subscribe to his email loop, email him at rdrepublican@windstream.net. 

The Conservative View: Where's the Work Ethic

This week's Conservative View, by Adair County Commissioner Russell Turner (R-Stilwell).

The Conservative View
by Russell Turner

Where's the Work Ethic?

One of the virtues that has defined us as a nation is our desire to go the extra mile and have pride in our workmanship. We Americans owe a lot to our ancestors; they did the hard work that made our standard of living possible. I was raised to believe that if you were willing to sacrifice and do the work and devote the time that most people refused to do you would get ahead in life. I believe that prosperity does not come cheap; it requires sweat and a willingness to get our hands dirty. I have noticed that many Americans have gotten into the mindset that we are too good to do hard work.

A few days ago I watched a report on how we Americans are not building anything anymore. Our manufacturing base has been on a steady decline for several years. One example given was on the building of computers. Most all of the computers today are built in countries like Korea and China. The proponents of the current system claim that we make the money on the software and programming of the computers. While that may work today, we Americans had better start to look at the potential problems that can bite us in the backside in the future.

We would be foolish to think that the people building the computers lack the intelligence to design the software and programs that future generations will need. Information can be one of the least kept secrets in the world. Just look at any of our major universities and you will see students from all parts of the world enrolled there. When other countries build their research and development facilities, we could find ourselves outside looking in. It would be a perfect world if we Americans could all work in air conditioned offices and just type on a computer and make six figures a year, but we live a long way from a perfect world. Our parents and grandparents knew the need to roll up their sleeves and be willing to get their hands dirty. During WW 2 it was the manufacturing capacity of our nation that was the deciding factor in our country winning that war. For a country to be strong it must have the ability to build the things that its people need. Government handouts are not the answer, the embracing of freedom and allowing people to prosper or fail on their own merits is the only answer.

If you wish to contact Russell Turner, or want to subscribe to his email loop, email him at rdrepublican@windstream.net.