Gov. Mary Fallin will call for a special legislative on September 25 with an apparent goal to raise taxes, including a run at restoring the cigarette tax that was declared unconstitutional.
“I am planning on calling a special session beginning September 25 for legislators to adjust the current fiscal year budget,” Fallin said. “I also want Oklahomans to know we are working diligently to address the fiscal matters of our state.”
The $1.50 added cigarette tax was struck down by the Oklahoma Supreme Court because the bill originated in the Senate (those bills must come from the House), it got less than 75 percent of the vote and the vote came in the last five days of 2017 legislative session.
Fallin claims the state’s 2018 fiscal year budget has a shortfall of $215 million as a result of last month’s ruling, and with the loss of matching federal funds state agencies estimate the total is nearly $500 million.
Several Republican legislators said the special session is not needed because state revenues are improving and there is room for state agencies to make cuts. A special session costs an estimate $30,000.00 a day and it is expected to last at least two weeks, costing taxpayers at least $300,000.00.
House Speaker Charles McCall said House Republicans will consider raising the cigarette tax in special session but will send it to a vote of the people if House Democrats again refuse to support the measure.
McCall said the Legislature will likely take up the cigarette tax and use existing cash to address the $215 million budget hole. The cigarette tax, if passed in special session, would generate approximately $122 million for the Fiscal Year 2018 budget. The House also likely would use a combination of $70 million of the $83 million available in Fiscal Year 2017 prior year cash and $23 million from the Rainy Day Fund, which would backfill the $215 million hole and prevent cuts to education, health care and other agencies.
“The cigarette tax is the only feasible tax option Oklahomans have said they would support. It would help us replace the funds lost when the Court rejected the cigarette fee,” said McCall, R-Atoka. “Unlike our Democratic colleagues, House Republicans have no intention or desire to tax the life out of Oklahomans just to grow government – especially at a time when our citizens are living on less. We are not going to raise a billion dollars in taxes to fill a $215 million budget hole.”
McCall said if the cigarette tax fails, the Legislature will send it to a vote of the people and use targeted cuts to make up the difference in the budget hole.
“House Democrats have shown time and again they are not going to help pass the cigarette tax despite it being the most feasible among Oklahomans,” said McCall. “They have not supported the cigarette tax during either of the last two legislative sessions, and we have no reason to believe special session will be any different. If they refuse to support the cigarette tax again, any further cuts to state agencies will be on them. The court struck down the cigarette fee, so the easiest path to replacing the funds is to pass the cigarette tax.
“House Republicans will convene in special session, as we are obligated to do. But we have to make decisions that are in the best interests of the citizens who sent us here, not what is in the best interest of special interests or bureaucrats.”
House Minority Leader Scott Inman, D-Del City, who is running for governor, complained that the Republicans have not yet raised taxes.
“While House Republicans seem content with making ‘adjustments’, the people of Oklahoma deserve better,” Inman said in a press release.