Tax Increment Financing Proposed for State Firms

By Wolfe, Lou Anne | THE JOURNAL RECORD, October 24, 1989 | Go to article overview
Save to active project

Tax Increment Financing Proposed for State Firms


Wolfe, Lou Anne, THE JOURNAL RECORD


A measure to allow manufacturers to use ad valorem tax revenues to pay for property improvements is being eyed by an Oklahoma House panel as another economic development tool for the state.

House Joint Resolution 1036, authored by State Rep. Bill Brewster, D-Marietta, would put to voters a constitutional amendment that would give new manufacturing businesses the option for tax increment financing, a method supporters say has been adopted by 30 states.

Monday was the second interim study meeting to be held on the measure by the House Committee on Industry and Labor Relations.

New manufacturing locations are already eligible for a five-year exemption on ad valorem, or property, taxes.

If it became law, House Joint Resolution 1036 would give them another alternative, but a company could not use both incentives simultaneously.

The proposal was advanced to Brewster by developers of the $65 million Tinker Business and Industrial Park in Midwest City. But, tax increment financing was also cited as a goal in House Bill 1444, a massive economic development measure passed in 1987.

Under tax increment financing, capital improvements for manufacturers in a specified geographical area are financed by bonds issued through a city council or county commission.

The bond debt is retired from increasing ad valorem tax revenues generated by the new development. In other words, the ad valorem taxes paid by the manufacturer would go toward the debt and not into the ad valorem kitty.

Ad valorem taxes go to fund school districts. Brewster said his resolution provides for schools to be reimbursed for lost ad valorem revenues from an account established for that purpose which is equal to 1 percent of all state income tax collections.

Schools are currently reimbursed from the fund for the ad valorem taxes they are losing from businesses eligible for the five-year exemption.

Brewster said the fund is now under-utilized, so he does not foresee it running short with the advent of tax increment financing. However, State Rep. Cal Hobson, D-Lexington and chairman of the House Appropriations Committee, said the reimbursement fund might need to be increased to 2 percent of income tax collections.

Warren Thomas, managing partner of the Tinker industrial park, said that reimbursement to school districts would be predicated on the availability of funds, and that reimbursement would not be mandated.

Dr. John Folks, superintendent of the Mid-Del School District where the industrial park is located, said he was initially concerned about the loss of revenues, but that he was reassured when he learned that the resolution calls for reimbursement to the school district of the amount of ad valorem revenues used in the tax increment financing.

Folks said he has not heard complaints from other districts on the proposal.

"The theory is, if the revenues do not exist today, they are not negatively impacting those who would receive them," said Thomas.

"But the job creation and revenue-generating potential will create revenue to pay off the bonds" and build the community, he said.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Tax Increment Financing Proposed for State Firms
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?