OKLAHOMA CITY -- Oklahoma's governor called for comprehensive tax reform as he vetoed lawmakers' plan to slash a controversial affordable housing tax credit.
Republican Gov. Kevin Stitt said he's advocating for tax reform, but he wants leaders to take a broader look at overhauling Oklahoma's tax policy to increase diversification and long-term sustainability.
"During an economic downturn, we should not single out winners and losers, but tackle broad and meaningful reform," he wrote in his veto letter of House Bill 2760.
Stitt said he received numerous calls and emails from constituents critical of the Legislature's plan to reduce the state's Affordable Housing Tax Credit from $4 million to $2 million.
He said the bill was retroactive and negatively affects projects already under contract.
The program, also referred to as the Low-Income Housing Tax Credit, is designed to increase the availability of new affordable rental and housing units by incentivizing private investment. The state's Housing Finance Agency reported Tuesday that three developments were under contract in Oklahoma City, Yukon and Edmond.
State Rep. Kyle Hilbert, R-Bristow, who co-authored the measure, said Tuesday a member of Stitt's cabinet initially suggested reducing the credit by $2 million. It had been part of the state budget agreement since March.
"It is odd that they vetoed a bill that a member of their administration requested," he said.
Hilbert said he stands by the legislation.
He said the state's Incentive Evaluation Commission reviewed the program in 2018 and found three years of funding generated about $10.4 million in tax revenue related to construction spending.
Over the 10-year incentive period for the projects, the state will issue $116.5 million in tax credits but see a net impact of $106.1 million, the commission found.
The commission also noted the affordable housing shortage is less prominent in Oklahoma than in other states, Hilbert said.
"It is never a good idea to give out tax credits that do not have a good return on their investment, but particularly when we are in the economic crisis that we find ourselves in currently," Hilbert said.
State Rep. Mark McBride, R-Moore, who opposed the measure, said Stitt made the correct decision. He said the tax credit is necessary and can help improve the living conditions for lower income Oklahomans.
"Why did we seek out a low-income tax credit when there's a shortage of affordable housing?" he asked. "There's a lot of other tax credits we could have gone after."
Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at email@example.com.