State Using Motor Fuels Tax To Pay Off Losses On Airline

OKLAHOMA CITY (AP) _ The state's financial losses after a Tulsa airline went bankrupt are being covered by tax money that would otherwise go toward repairing Oklahoma roads and bridges, according to

Sunday, May 14th 2006, 11:19 am

By: News On 6

OKLAHOMA CITY (AP) _ The state's financial losses after a Tulsa airline went bankrupt are being covered by tax money that would otherwise go toward repairing Oklahoma roads and bridges, according to a copyright story in The Oklahoman.

The newspaper reports that state Transportation Department officials say that the $27 million from the state's motor fuels tax revenue, which is being used to cover losses stemming from tax credits awarded to Great Plains Airline, would be enough to resurface 135 miles of road or rehabilitate 90 bridges.

Since 2003, almost $17 million has already been diverted from that tax revenue. The rest will be diverted in future years, said Mike Patterson, the transportation department's chief financial officer.

``That certainly has made an impact on our maintenance program,'' Patterson said.

The state Legislature granted Great Plains Airline $27 million in tax credits in separate installments in 1999 and 2002. When buyers of tax credits use them to offset taxes they would otherwise owe, the state Tax Commission takes motor fuels tax revenue to cover the cost.

Had the airline been successful, it would have reimbursed the Transportation Department with subsidies the company would have received for creating jobs. But instead, the state was left to pay the bill when the airline failed.

``We took a flier with it and lost,'' said State Sen. Ted Fisher, D-Sapulpa, who authored the bill that granted Great Plains the tax credits.

State Sen. Kevin Calvey, R-Del City, said that looking back, the Great Plains bill was not a quality piece of legislation, because it provided no guarantee that the state could recover its investment, either through increased economic activity or collateral.

Calvey voted for granting the airline $18 million in tax credits in 1999 but voted against the proposal to give Great Plains $9 million more in tax credits in 2002. He said that the airline's planes ``didn't even have the fuel capacity to reach the coasts'' despite promises of nonstop flights to those destinations.

Similar legislation has granted an Oklahoma company called Rocketplane, which wants to establish a commercial space flight business, $17.9 million in tax credits.