Budget dominates the end of session

As usual, budget talks heated up in the Oklahoma Legislature as the session was scheduled to close this week.

There is speculation that the major tax increases proposed by Gov. Mary Fallin won’t get passed unless she calls for a special session this summer.

Lawmakers were negotiating behind closed doors last week to hammer out a compromise for the budget. One proposal was to raise the gross production tax from 2 to 5 percent.

The Oklahoma Senate last week approved a budget plan that increases taxes and holds education agencies, the Department of Corrections, and the Department of Human Services harmless, with cuts to other state agencies.

“The Senate has negotiated patiently all-session long, but it’s time for the budget gimmicks to end,” said President Pro Tem Mike Schulz, R-Altus. “We were elected to lead and guide this state in a responsible manner, and that is precisely what the Senate budget does. Like we’ve said all along, the solution to this year’s budget will come via a combination of cuts to agencies, new revenues, and structural budget reforms and that’s what is included in the Senate budget.”

Sen. Greg Treat, R-Oklahoma City and Majority Floor Leader, said, “The time for gamesmanship is over. We cannot sit by and continue to wait on unfulfilled schemes to materialize. The Senate budget plan is a tough, yet responsible way to land the plane on the runway and move our state forward.”

Sen. Kim David, R-Porter and Senate Appropriations chair, supported the tax increases in the plan.

The Senate budget plan included $510 million in new revenue including:

  • $239 million through reforms to “off-the-top” transportation funds, includes $125 million from increasing tax on gasoline and diesel by $0.06 per gallon;
  • $215 million from increasing the cigarette tax $1.50 per pack;
  • $43 million by eliminating oil and gas gross production tax rebates;
  • $16 million by eliminating manufacturing sales tax exemption for the wind energy.

The Senate budget also includes $69 million from revenue bills already signed by the governor.

House Speaker Charles McCall said the House would not vote for an increase fuel tax.

“The Senate budget plan has already been proposed by House Republicans, and it was found to have no bipartisan support for the fuel tax,” McCall said. “The Senate has known this for weeks, so what they proposed today is not a real solution to the budget problem. Per our Constitution, revenue-raising measures must start in the House. We have a bipartisan plan in place in the House that, with Senate approval, would unlock $436 million in revenue for the budget.”

Fallin said she was disappointed that fiscal conservatives in the House rejected her plan to raise taxes on cigarettes. House Bill 2372 would have hiked the tax on cigarettes by $1.50 per pack.

“I’m disappointed in those legislators who put political games and Washington-like gridlock ahead of the lives of Oklahomans and the core services our citizens expect,” Fallin said.

McCall also criticized the failure of raising the new tax on cigarettes and he had worked to get Republicans to support the new tax.

“Seventy-five percent of the House Republican Caucus voted today in favor of the tobacco tax that would generate $215 million in new revenue for Oklahoma,” McCall said. “Less than half of our colleagues in the Democratic Caucus were willing to help us pass that measure, even though it is part of their own budget plan. It is obvious that House Republicans are leading and not playing politics with issues. While low support from Democratic members is disappointing, we still have an opportunity to pass this measure this week.”