The Oklahoma Policy Institute said last week that ongoing budget woes present an opportunity to review the state’s extensive system of tax breaks.
Oklahoma law provides for more than 450 separate tax exemptions, deductions, incentives, credits, and the like, which are known as tax expenditures, according to the latest report from the state policy organization.
The Oklahoma Tax Commission recently estimated that the tax expenditures totaled at least $5.6 billion in lost revenue in fiscal 2008, an amount equal to more than 75% of direct state appropriations and an increase of more than $1 billion compared to fiscal 2006.
The policy report said the state tax breaks are not reviewed regularly by lawmakers, often are enacted without a clear estimate of the financial impact, and are often inefficient in accomplishing the stated goals.
Democratic Gov. Brad Henry’s proposed fiscal 2011 budget would generate more than $100 million in additional revenue by eliminating or suspending a number of existing tax expenditures, according to the Oklahoma Policy Institute’s report.