Oklahoma legislative panel to review energy-efficiency tax credits
Amy Bass, a new home consultant for Ideal Homes, stands at the doorway of the company's model home in the housing addition, Red Canyon Ranch. Bass not only sells the homes but also lives in one of the energy-efficient houses. She bought the home in November 2008. She says she and other Ideal Home owners save between $50 and $80 per month on their utility and gas bills. JACLYN COSGROVE - OKLAHOMA WATCH appliances.The credit is available for new homes measuring 2,000 square feet or less. To qualify, homes must be at least 20 percent more efficient than the standards required by the International Energy Conservation Code of 2003.
The Oklahoma Tax Commission has determined that the energy-efficiency credit reduced state revenue collections by $3.8 million last year. In 2010, the credit was suspended for two years as part of a budget-balancing deal. It is scheduled to go back into effect July 1, 2012.
“We should only have taxpayers subsidizing economic activity if it broadens and grows and increases our tax base,” said state Sen. Mike Mazzei, R-Tulsa , co-chairman of the 10-member Task Force for the Study of State Tax Credits.
“Small subsidies that are frittered around to lots of different interest groups that have marginal, short-term consequences, in my opinion, are not items that are doing that,” said Mazzei, a financial planner and chairman of the Senate Finance Committee .
Mazzei said the criteria for retaining a tax credit include whether it provides high-paying jobs or brings people to live and stay in Oklahoma .
conserving products, indicates $18 billion was saved nationally on utility bills in 2010 through the program.Ideal Homes of Norman , Home Creations of Moore and Simmons Homes of Tulsa are among the state's largest homebuilders. Each claims the tax credit, Tax Commission records show. In 1997, Ideal Homes became the state's first Energy Star builder.
Ideal Homes' co-owner Vernon McKown said his company will continue to build energy-efficient homes, regardless of any state or federal tax credits.
But McKown predicted that many smaller builders would not continue building energy-efficient homes without the credit because the homes cost more to build. It's difficult to pass on increased construction costs to the cash-strapped, first-time homebuyer.
Dramatic change
“The tax credits were a great way to get to the building community,” McKown said. “If you look at the number of builders who were building Energy Star and high-performance homes pretax credit and the ones who were after the tax credit, it just blew up. … The number was just gangbusters. It was more than a doubling. … It brought about a dramatic change in our industry.
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But McKown predicted that many smaller builders would not continue building energy-efficient homes without the credit because the homes cost more to build. It's difficult to pass on increased construction costs to the cash-strapped,
In total, Empowerhouse said the home will cost $250000 to build, a price they consider a small sum given its potential to impact thousands. The team said that since their design is easy-to-build (it was 99 percent built by unskilled laborers like
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Oklahoma Watch: Energy-efficiency tax credit
The merits of a state tax subsidy for energy-efficient home construction will be examined Wednesday, Aug. 10, by a legislative task force assigned to identify tax breaks that are candidates for elimination.
The energy-efficiency tax credit became law in 2005. It provides a subsidy of up to $4,000 per home to builders who meet certain efficiency standards for heating, cooling, insulation, roofs, doors, windows and appliances.
The credit is available for new homes measuring 2,000 square feet or less. To qualify, they must be at least 20 percent more efficient than the standards required by the International Energy Conservation Code of 2003.
The energy-efficiency credit reduced state revenue collections by $3.8 million last year, according to the Oklahoma Tax Commission. In 2010, the credit was suspended for two years as part of a budget-balancing deal. It is scheduled to go back into effect July 1, 2012.
“In my personal opinion, we should only have taxpayers subsidizing economic activity if it broadens and grows and increases our tax base,” said state Sen. Mike Mazzei, R-Tulsa, co-chairman of the 10-member Task Force for the Study of State Tax Credits.
“Small subsidies that are frittered around to lots of different interest groups that have marginal, short-term consequences in my opinion are not items that are doing that,” said Mazzei, a financial planner who also chairs the Senate Finance Committee.
Mazzei said the criteria for retaining a tax credit include whether it provides high-paying jobs or brings people to live and stay in Oklahoma.
Proponents of the tax homebuilder credit say building energy-efficient homes will lessen overall energy demand and the need to build new power plants, keeping consumers’ energy bills lower than they would be if more plants had to be built.
The U.S. Department of Energy estimates that residential housing makes up about a quarter of all energy usage. The website of Energy Star, an Environmental Protection Agency program that debuted in 1992 to encourage energy-conserving products, indicates $18 billion was saved nationally on utility bills in 2010 through the program.
Norman-based Ideal Homes, Home Creations of Moore and Simmons Homes of Tulsa are among of the state’s largest homebuilders, and all use the tax credit, according to Tax Commission records. Ideal Homes became the state’s first Energy Star builder in 1997.
Ideal Homes co-owner Vernon McKown said his company will continue to build built energy-efficient homes, regardless of whether state or federal tax credits are available to help cover the costs.
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