Corporate Welfare Rears Its Ugly Head Again
The citizens of Oklahoma dodged a bullet yesterday during a vote in the State House regarding corporate tax credits.
The bill, which would have created the Oklahoma Affordable Housing Act, narrowly failed a House vote 39-40. After the vote, however, there was a motion to reconsider that passed 52-20.
The legislation was authored by Senators Bryce Marlatt and Representative Mike Jackson and it intended to provide tax credits to contractors to build low-income housing in rural areas.
The bill passed the State Senate 35-12 on March 12.
During debate, the main opposition to the bill came from Republican Rep. David Brumbaugh, Republican Rep. Mike Reynolds and Democratic Rep. Richard Morrissette.
Rep. Brumbaugh asked the question “How do we go to our districts and say we are fiscally responsible and believe in limited government when we spend $9.2 million on this?”
Rep. Morrissette echoed this statement saying “This is simply not right. If you’re going to be true to conservative principles, you can’t vote for this.”
Rep. Reynolds voiced his opposition as well saying “We don’t have the money to fund hyperbaric chambers for veterans but we have money to line the pockets of Jeffrey Smith.”
Jeffrey Smith, the man Rep. Reynolds is referring to, is one of many out-of-state real estate developers that stand to gain substantially from this legislation. It comes as no surprise that this Jeffrey Smith contributed quite a substantial amount of money to many of our state’s legislators last year.
Specifically, he contributed $1000 to Rep. Mike Jackson (the co-author of this bill, big surprise), $5000 to Rep. Mike Sanders, $2000 to our distinguished speaker T.W. Shannon, $2000 to Sen. Bryce Marlatt (the other co-author of this bill), $1000 Sen. Rob Johnson, and $1000 to (absolutely no surprise at all here) Sen. Clark Jolley.
Legislation like this that lines the pockets of real estate developers is nothing more than legislating for the special interests, not the public interest. Under the guise of creating low-income housing for the poor, these legislators are on track to lose the state millions of dollars in revenue by giving these corporations tax credits.
In fact, during the debate on SB804, it was mentioned the Missouri passed a similar bill and lost nearly $61 billion. Similar tax credits were instituted under Obama’s American Recovery and Reinvestment Act, also known as the Stimulus. A stimulus it was not, the result of those tax credits were a loss of billions of dollars.
The fact is that legislators in Oklahoma like Jackson, Shannon and Jolley are bought and paid for and care more about lining their pockets and bowing down to the special interests then they are about representing the people of Oklahoma and enacting legislation that protects their interests.
Giving tax breaks, grants, or other preferential treatment to corporations is nothing more than crony capitalism. Supporters of corporate welfare seem to think they are doing good for their communities and solving some sort of failure in the market system, so they advocate for subsidies like this one. The truth of the matter is that subsidies like these are what cause these market failures in the first place.
Welfare, in all of its forms it simply taking money from one person or one group of people, and transferring that money to another person or organization. What is right about that? The answer is nothing. Corporate welfare plays on the greed of businessmen and allows these businessmen to get their way by contributing obscene amounts of money to our legislators in return for legislation like this that benefits them.
Sadly, Oklahoma’s State Legislature is full of those who would rather serve the special interest than the people they represent and SB804 is one more example of that.
Corporate welfare is not limited government. Corporate welfare is not fiscal responsibility. Corporate welfare is not a benefit to the state. Corporate welfare is exactly what it is. Welfare.
Let’s just hope that common sense and true fiscal responsibility prevail and this bill (and others like it), if brought up again, fail miserably.