Political pressure mounts amid budget bill delays
For the second time in two days, Oklahoma Senate and House leadership abruptly canceled budget hearings that typically are used to roll out significant revenue-raising measures.
The move suggests ongoing talks behind the scenes about which revenue bills might have enough Democratic votes to advance, and whether GOP leadership will budge on demands to raise the oil and gas production tax rate.
Both meetings were rescheduled for Thursday. Lawmakers didn’t elaborate on the reason for delaying, but politics might not be the only reason. The last major deadline before adjournment is Thursday, and budget meetings would cut into the time that lawmakers have to finish floor action this week.
Just hours before the House Joint Committee on Appropriations and Budget was scheduled to meet, Democrats staged a news conference at a convenience store gas pump near the Oklahoma Capitol. Democratic leader Scott Inman said Republican leadership was planning to introduce a 6-cent increase to the motor fuel tax, which he said would cost families an extra $150 at the pump each year.
If the fuel tax proposal is introduced, Republicans would need Democratic votes for it to pass.
Inman cast it as a choice between big oil and small consumers, and he again said House Democrats would only support major revenue-raising measures if leadership offers to raise the oil and gas production tax rate from 2 percent to at least 5 percent.
“What makes it all the more appalling is they refuse to raise gas taxes on oil and gas companies, but they want to raise gas taxes on the citizens of our state,” said Inman, D-Del City.
Some members of the GOP caucus seem to agree that Oklahoma should boost revenue from the energy industry. Before Inman’s news conference, Appropriations and Budget Chairwoman Leslie Osborn stood alongside a group of energy producers calling for a gross production tax rate of 7 percent.
The Oklahoma Energy Producers Alliance linked the proposed tax increase to a teacher pay raise, saying that the increase would bring in $500 million, which could pay for a raise and about half of this year’s budget shortfall.
Osborn didn’t endorse a particular number, but she suggested that 2 percent on Oklahoma’s oil and gas production isn’t high enough to sustain core services like education.
“We have to come together with our partners, like this wonderful group of energy partners that has come together with us and said, ‘we set the rate too low,’” said Osborn, R-Mustang. “We have to look forward to bringing in new recurring dollars, and there is nothing more important to fund besides those core services than our future. And our future is our children.”
The alliance is made up of small producers who, for the most part, operate wells that are already taxed at 7 percent. Oklahoma’s gross production tax is 2 percent for the first three years on horizontally drilled wells. Production after three years is taxed at 7 percent, and older-style vertically drilled wells are also taxed at the higher rate.
The alliance’s proposal has become an extension of a political fight that has been simmering for years, pitting owners of older, less efficient wells against the companies that drill horizontally.
Tim Wigley, president of the Oklahoma Independent Petroleum Association, said oil and gas producers would avoid Oklahoma if lawmakers increase the production tax rate.