2NEWS investigates: State tax credits

TULSA - It's your money, in lawmakers hands.

"We're out here to spend the taxpayers' money responsibly," said Oklahoma Representative David Dank, R-Oklahoma City.

"I really don't think we're doing that in a lot of respects," said Dank.

"When you sit down and look at this your first thought is, 'I can't believe this is going on,'" said Gary Jones, Oklahoma state auditor.

A 2NEWS investigation found little to no oversight when it comes to many state tax credits. The money is supposed to go job creation, investments or economic development, but it's hard to tell if that's happening because those specifics are on tax forms and tax information is protected by law.

"Everything we have is confidential until the law states that we make it public," said Paula Ross, with the Oklahoma Tax Commission.

Dank and Jones fear that can open the door to abuse.

"We don't have any transparency," said Dank.

Here's what we do know: The value of the tax credit, who gets it and a vague description of what the credit is supposed to be for such as job creation -- that's where the public information stops.

We don't know specifics on how the recipient plans to meet the guidelines of the tax credit -- or even more concerning for the state auditor -- if that's how the credit was used.

"It's such a secretive program that the citizens of Oklahoma don't know," said Jones.

So as part of our investigation, we looked over the information that is public.

During 2009, the largest tax credit in the category of Oklahoma investment and/or new jobs went to Quad Graphics. Its a printing company that has a building in Oklahoma City and received $26.5 million in tax
credits.

When we asked for details from the Tax Commission, which oversees the credits, it said, once again, that information isn't public. So we asked Quad Graphics.

They told us the money they saved in tax credits allowed them to upgrade IT and equipment, build a cafeteria and a clinic onsite for employees and their families and to maintain an in-house fitness center.

But two years later, the company announced plans to shut down its Stillwater plant. Quad Graphics says they laid off 236 employees, the goal being to consolidate with the OKC plant but since getting the 2009 tax credit it's added just 100 jobs there and it's looking to fill another 50 to 75. Even if all of those positions are filled, Quad Graphics still cut at least 60 Oklahoma jobs but received $26.5 million in tax credits.

When we asked Quad Graphics about the job cuts, we were told it followed tax credit guidelines.

"The tax credits are for job creation and/or capital investments, such as plant expansion, and equipment additions and enhancements," a spokesperson for the company said.

The auditor doesn't think that's what the citizens of Oklahoma want to see when it comes to how their money is spent. He says it's just one of many examples.

"It's rumored that somebody is going to get over $100 million of tax credits and we don't even know what it is exactly that they have done or why they're getting them," said Jones.

Others argue that without the credits, some developments wouldn't happen.

Architect Mike Sikes says a tax credit aimed at preserving historic buildings makes preserving old buildings possible. He's working on one building in the Brady District.

"The misconception is that there is actually a hand-out, a check that actually comes to you and there's no check that actually comes, not at all," said Sikes.

In fact, Sikes says it's a lengthy, highly scrutinized process to get the credit.

Dank and Jones admit some tax credits are really beneficial. But again, they say it's the fact that we can't know for sure that's the problem.

Next session Dank plans to file legislation that would require more oversight so that taxpayers know where their money is going. In the meantime, he has some homework.

"To educate legislators because, you know, they don't really have a clue on what all is involved with a lot of these credits and what we're giving them for, what constitutes giving them," said Dank.

A 1980 state supreme court ruling states the auditor does have the authority to look into tax credits.

Despite the confidentially clause, the auditor is using that ruling as grounds to examine tax credits, which has never been done before.

He plans to start by examining three credits, and would like to examine more. We should mention, state tax credits were deferred for two years due to the economy, that was lifted this year.

You can search state tax credits here .

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