GOP offers vote on Dems’ favorite tax hike

After weeks of political wrangling, a budget measure is expected to be put to a vote in both the state House and Senate.

Oklahoma Democrats could get their vote on a 5 percent gross production tax, but only if they support a Republican revenue plan introduced this week.

House Floor Leader Jon Echols made the pledge during debate on the revenue bill that would raise more than $173 million from taxes on cigarettes, motor fuel and lowpoint beer.

It could be enticing for Democrats, who so far stand opposed to the plan introduced by Gov. Mary Fallin and legislative leaders on Monday. The minority party wants to raise the tax rate on oil and gas production to at least 5 percent before considering other measures.

“He has my word, the very next bill will be a 5 percent GPT,” Echols said later in the day, referring to Democratic Leader Scott Inman. “If he wants to get serious and come up with a number we can pass, then let's talk about that.”

Echols, R-Oklahoma City, also called 5 percent “an impossible number” to get enough Republican votes.

Despite the promise, immediate reaction among Democrats was tepid at best. State Rep. Jason

Dunnington, D-Oklahoma City, replied that his caucus would support the GOP plan, but only if the gross production tax increase is in the same bill.

House Bill 1035 is scheduled for a floor vote in the House and Senate on Wednesday.

If adopted, it would raise the cigarette tax by $1.50 per pack, which combined with other proposed tobacco tax increase, would bring in about $106 million this year alone. Another section raises the gasoline and diesel tax by 6 cents per gallon.

The bill would also boost collections from low-point beer sales.

There’s not much optimism for the revenue package, which realistically needs about two dozen Democratic votes to pass. If the measure fails, other measures tied to its success will fall, too. Among those are a $3,000 teacher pay raise, a $1,000 state employee raise and the reinstatement of the earned income tax credit.

Democrats generally oppose the fuel tax proposal because it is considered regressive — 6 cents per gallon affects a poor person more negatively than someone who’s wealthy.

You’re asking those people who are allegedly going to benefit from this bill to pay for it,” said state Rep. Emily Virgin, R-Norman. “Let’s go back to the drawing board and ask the largest and wealthiest industry in our state to pay their fair share.”

Several Republicans oppose the bill. State Rep. John Bennett, R-Sallisaw, said he’s worried about convenience stores along the Arkansas border, an area he represents. Bennett suggested auditing agencies first, then only proposing a tax increase with a statewide vote.

If the bill survives long enough to be signed into law, it would fill most of the $215 million budget shortfall. The rest of the budget gap would be filled with cash the state already has on hand.