Oklahomas Historic Tax Credit and its Impact on the States Economy - - PowerPoint PPT Presentation

Oklahoma’s Historic Tax Credit and its Impact on the State’s Economy

Donovan Rypkema PlaceEconomics

Tests of a good economic develo lopment in incentiv ive

• 1. The incentive achieves the purposes for which it was create
• 2. There are measurable economic development benefits
• 3. The incentive significantly leverages private investment
• 4. The use of the incentive meets the “but for” test

The best economic development incentives meet an additional test:

• 5. There are significant benefits of the incentive beyond just

economic development

The Oklahoma Historic Tax Credit meets ALL ALL

• f those tests

If you can’t write your idea on the back of my business card, you don’t have a clear idea.

• 77 historic rehabilitation projects were

completed between 2001 and 2015 representing investment of more than $500 million.

• Every $1 of State Tax Credit catalyzes $11.70 in

economic activity in Oklahoma.

• Tax credit projects have generated paychecks of

nearly $310 Million for Oklahoma workers.

• The State of Oklahoma gets back over half their

tax credit expenditure before the credit is even awarded.

• On average there has been 25% more invested in

these projects than qualified for the tax credit

2 4 6 8 10 12 14 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Oklahoma Tax Credit Projects 2001 - 2015

Amount of QRE Additional Investment Number of Projects

$0 $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cumulative Investment Tax Credit Projects

QRE Additional Investment

46.8% 23.4% 29.9%

Project Numbers by Location

Oklahoma City Tulsa Elsewhere in Oklahoma

16% 18% 10% 9% 18% 12% 17%

Tax Credit Projects by Size

Less than $200,000 $200,000 - $500,000 $500,000 - $1,000,000 $1,000,000 - $2,000,000 $2,000,000 - $5,000,000 $5,000,000 - $10,000,000 More than $10,000,000

Projects under $1 million Projects between $1 million-$10 million Projects over $10 million Oklahoma City Ada Oklahoma City Tulsa Tulsa Tulsa Perry Oklahoma City Guthrie Bartlesville Drumright Sapulpa Edmond Norman Ardmore Idabel Pawhuska Muskogee Bristow Enid Anadarko Shawnee Watonga Cordell Jones

$242,870,780 $230,896,359 $46,555,002

Location of Projects by Investment

Oklahoma City Tulsa Rest of Oklahoma

26% 34% 25% 9% 6% 0% 20% 40% 60% 80% 100%

Historic Tax Credit Project Use

Residential Mixed Use Office Commercial Hotel

100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Jobs from Tax Credit Projects

Total Jobs Direct Total Jobs Indirect & Induced

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 $45,000,000 $50,000,000 $55,000,000 $60,000,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Salaries and Wages from Tax Credit Projects

Labor Income Direct Labor Income Indirect & Induced

If the average historic preservation tax credit activity over the last 15 years were a single industry, it would be among the largest 5% of firms in Oklahoma

2 4 6 8 10 12 14 16 18

Petroleum refineries Biological product manufacturing Telecommunications Carriers Drilling oil and gas wells Software publishers Data processing, hosting, and related services New Construction Truck transportation Building Rehabilitation Hotels and motels, including casino hotels Beef cattle ranching and farming, including feedlots…

Jobs/$1,000,000 Output Direct, Indirect, Induced

$0 $150,000 $300,000 $450,000 $600,000 $750,000

Beef cattle ranching and farming Petroleum refineries Telecommunications Carriers Biological product manufacturing Software publishers Hotels and motels, including casino hotels Data processing, hosting, and related services Drilling oil and gas wells New Construction Building Rehabilitation Truck transportation

Salary and Wages/$1,000,000 Output Direct, Indirect, Induced

• $100,000.00

$0.00 $100,000.00 $200,000.00 $300,000.00 $400,000.00 $500,000.00 $600,000.00

State Tax Credit QRE Investment Additional Investment Indirect/Induced Economic Activity

Effect of $100,000 Historic Tax Credit

Initial Returns to the State of Oklahoma before Credit is Rewarded (per $100,000 in credits) Personal Income Tax $19,537 Business Income Tax $6,556 State Sales Tax $25,560

The “salability” of the Oklahoma Historic Tax credit are a major

• advantage. In other

states $.65 to $.75

• n the $1.00 is a

typical selling price. In Oklahoma developers are getting $.80 to $.90

Your friends to the south.

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 Texas Oklahoma Texas, $268,161,054 Oklahoma, $17,391,442

Five Years Prior to Tax Credit

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 Texas Oklahoma Texas, $194,969,209 Oklahoma, $222,602,306

Most Recent Five Years

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 Five Years Prior to Tax Credit Most Recent Five Years

Historic Preservation Investment Oklahoma vs Texas

Texas Oklahoma

Congratulations, Oklahoma, for having one

• f the best Historic Tax

Credit programs in America

Thank you very much