Rep. Miller says the ‘fee’ is a ‘tax’ – and analyzes tax credit controversy

By Patrick B. McGuigan
Published: 17-May-2010

In an interview with CapitolBeatOK, state Rep. Ken Miller of Edmond, chairman of the House Appropriations and Budget Committee, was asked to comment on last week’s legislative debates over the hospital provider “fee” or “tax” proposal.

An economist by trade who teaches at Oklahoma Christian University, Miller reflected, “Anything based on a percentage of the cost is a tax. The provider proposal is a tax. It’s called a provider fee — but a percentage of something, rather than a flat fee, is a tax. Percentage? That’s a tax. Flat amount? That’s a fee. The hospital provider fee looks an awful lot like a tax to me.”

Concerning another hot button in recent legislative debates, the role of tax credits and exemptions in encouraging economic activity, Rep. Miller said, “The discussion is a positive outcome flowing out of a negative situation. The serious problems we face are bringing about an opportunity to start to address something that perhaps we’ve neglected or ignored. The sequence has been we’ve had discussions, debates, even arguments; and then, we’ve had the budget process. That has led us to look at tax credits and to establish priorities in a year where we simply had to do so.

“A tough year like this gives the political will and sense of urgency about issues that is sometimes lacking in years when everything is going reasonably well.”

He continued, “What I’m trying to say is that this has not all been negative. We have certainly begun a serious review of everything we’re doing to see if the credits, exemptions or other incentives are actually accomplishing the intended goals in terms of economic development, jobs and other objectives.”

Miller summed up the discussion so far: “The conclusion at this point seems to be that by and large and on the whole, some have, and some haven’t.”

He credited state Rep. Skye McNiel, a Bristow Republican, for doing “a good job in carrying a bill to take us in the right direction.”

While the next installment in the tax credit debate will be written over the next few days, Miller told CapitolBeatOK, “I will say that I favor sun-setting all of the credits to assure a regular and timely review, to force us in that direction. Even for such widely supported tax credits as those to encourage horizontal drilling and deep well drilling, I think a three-year sunset is good policy.”

He continued, “I would like to see more uniformity in all incentives and tax credits. The advantage of a moratorium is that it would allow time to do a ‘vetting’ of all the incentives while undergoing a one-year suspension or moratorium. I do not favor getting rid of these as aggressively as some have pressed. I believe that would hurt our state’s competitive position in the market.”

Rep. Miller discussed a wide range of issues in a recent interview with CapitolBeatOK, including his upcoming primary campaign versus former state Sen. Owen Laughlin. His comments on that campaign and on several legislative matters are in a separate article.