Budget showdown looms as oil, gas tax hike moves ahead
A $132 million funding bill — that if approved would all but end the state budget crisis — is headed for a final vote in the Oklahoma Legislature.
It advanced Tuesday from the House and Senate Joint Committees on Appropriations and Budget. It can be heard in both chambers and sent to Gov. Mary Fallin’s desk this week.
“I’m imploring Republican and Democratic House members to vote for this measure ... so that we help fill our budget hole for the current fiscal year as well as put Oklahoma on a more stable budget path,” Fallin said in a prepared statement Tuesday. “This bill allows us to address the funding of core services going forward. This also provides much-needed pay raises for public school teachers and includes pay raises for our hard-working state employees as well as tax relief for low-income Oklahomans.
“Let’s prove to Oklahomans that we can solve our difficult budget problem and move our state forward.”
The measure, known as House Bill 1054, is identical to House Bill 1035, a measure advanced by the Senate on Monday as the “last chance” before budget cuts are necessary. Because lawmakers haven’t yet found a solution, the three state agencies most affected by a mid-year loss of $215 million have already begun the process to shut down programs and services.
The bill is what lawmakers call the “A-plus” revenue option, which includes tax hikes on tobacco, motor fuel, lowpoint beer and the production of oil and gas. It’s estimated to bring in $132.9 million over the next eight months. For the next full budget year, it could raise $430.1 million, said Senate Appropriations Committee Chair Kim David. The revenue is expected to be enough to fund $3,000 teacher pay raises and $1,000 state
employee raises in 2018.
If the House and Senate pass the bill and the governor signs it, there would still be a $57 million funding gap that David said would be filled with a combination of budget cuts and raids on agency savings accounts.
Senators are wary of adopting a “cash and cuts” plan, which would use all of the state’s extra revenue that was left over from last budget year.
“We’ve already seen in the last week or so that we have issues with the Health Department that needs cash,” David said. “Our desire is to keep that cash available for agencies
going forward.”
House Floor Leader Jon Echols, R-Oklahoma City, told reporters he was worried about the bill that senators advanced on Monday, saying it might be unconstitutional because of the procedures used to advance it.
“It’s a case of first impression,” he said Tuesday morning. “I don’t know if it would (be constitutional); I don’t know if it wouldn’t.”
Because of those worries, House and Senate leaders agreed to push the other measure, House Bill 1034, forward through the joint committee process, which allows them
more flexibility.
The revenue plan was supported byevery Senate Democrat in the chamber on Monday, making it likely they would support the measure again on Wednesday. The biggest hurdle remains the opinion of House Democrats, whose voting bloc has stymied every proposed tax hike so far.
Whether it passes will rely on an odd coalition of Democrats and conservative Republicans who have blocked every taxraising measure so far in the special session. For this bill, House leadership needs at least 76 votes to send it to the Senate and
governor; there aren’t that many Republicans in the House, meaning they will need at least a handful of Democrats to cross the aisle.
“This bill will kill goodpaying jobs because it will raise the cost of raising capital for oil and gas providers,” said state Rep. Kevin Calvey, R-Oklahoma City.
Tulsa Democrat Eric Proctor said the tax increase would be regressive and disproportionately affect poorer Oklahomans.
The final tally in the House committee was 19-6. Three of the six Democrats on the committee
voted for it; Jason Dunnington of Oklahoma City, Emily Virgin of Norman and Ben Loring of Miami. Earlier tax increase proposals have needed almost two dozen Democrats to pass.
In the Senate Committee, lawmakers also advanced bills that would enact pay raises and restore the earned income tax credit. Another measure would force the Department of Human Services to fully fund the ADvantage Waiver Program, adult day services, foster care, senior nutrition and other services that are on the chopping block.