Tesla in Tulsa

The Golden Driller, painted as Tesla founder Elon Musk, during a press conference for Tulsa for Tesla at Expo Square on Wednesday, May 20, 2020. IAN MAULE/Tulsa World

A popular business incentive was saved by a gubernatorial veto on Thursday, but that same veto may mean many of those not benefiting from the program will lose their eligibility for it.

Senate Bill 1595 would have given existing participants in the manufacturing ad valorem tax exemption a year’s grace from meeting the qualifying payroll level, but it would have also blocked any further applications for the incentive.

The Tulsa, Oklahoma City and state chambers of commerce lobbied Gov. Kevin Stitt to veto SB 1595, saying it would likely kill several pending negotiations. Included with those are Tulsa’s bid for a Tesla cybertruck factory.

“I will continue to push for comprehensive tax reform,” Stitt said in a press release. “However, it is not fair to change the rules for businesses without bringing them to the table to be part of the solution.”

Under the manufacturing ad valorem tax exemption, the state essentially pays the property taxes on capital investments by certain industries for up to five years. The recipients must meet annual benchmarks, including payroll, or lose the exemption.

Some lawmakers have grown alarmed by the rapid increase in the program’s cost, from less than $40 million eight years ago to $161 million this year. Taking advantage of this year’s compressed legislative schedule, Appropriations and Budget Chairman Kevin Wallace, R-Wellston, managed to get HB 1595’s repeal section through the House and Senate with few if any members noticing.

Tulsa Mayor G.T. Bynum and Oklahoma City Mayor David Holt cheered the veto, as did executives with HollyFrontier and Webco Industries, both of which participate in the program.

Tulsa County has about 30 participants, the most of any county, who received a total benefit of $13.8 million.

Brent Kisling, executive director of the Oklahoma Department of Commerce, said earlier this week he did not know how many of the several hundred recipients statewide might not meet their payroll requirements because of the COVID-19 epidemic.

Kisling said the department does not believe it has the latitude to allow leniency without legislative authorization.


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Randy Krehbiel 918-581-8365

randy.krehbiel@tulsaworld.com

Twitter: @rkrehbiel

Randy has been with the Tulsa World since 1979. He is a native of Hinton, Okla., and graduate of Oklahoma State University. Krehbiel primarily covers government and politics. Phone: 918-581-8365