Oil groups support Step Up Oklahoma
Leaders of two Oklahoma oil and gas associations on Tuesday announced their support for a slate of reform and revenue measures advocated by a coalition of Oklahoma civic and business leaders called Step Up Oklahoma.
Tuesday's endorsements came from the board of directors of the Oklahoma Oil & Gas Association and the executive committee of the Oklahoma Independent Petroleum Association.
Endorsements by those groups is considered critical to the potential success of Step Up Oklahoma's comprehensive slate of reform and revenueraising proposals because the oil and gas industry is being asked to pick up the tab for about $133.5 million in new state revenue through an increase in the gross production tax.
Other sources would be responsible for the rest of the nearly $800 million in new revenue Step Up Oklahoma is advocating.
New revenue from the oil and gas industry would come by raising the gross production tax to 4 percent on all new wells and existing wells currently paying 2 percent. Those rates go up to 7 percent after 36 months.
“OKOGA realizes our state is facing serious budget issues that must be immediately addressed,” said Chad Warmington, OKOGA's president. “We support this plan because it does not perpetuate the bad economic policy of isolating taxes to one single industry, and because it demands compromise from multiple industries and other sources.”
Warmington said the vote was not easy because OKOGA members realize increasing production taxes may lead to less investment in Oklahoma.
However, he said members have agreed to line up behind the plan if lawmakers will agree to keep all the other proposed revenue-raising measures intact so that the tax burden is spread out.
OIPA President Tim Wigley voiced similar sentiments, saying his group's support was contingent on the Legislature's willingness to retain all the revenueraising measures presented in Step Up Oklahoma's proposals as well as the group's call for a $5,000 teacher pay raise.
“The OIPA and the oil and natural gas industry as a whole have always been willing to discuss our tax rate and our members have proven they are willing to increase their tax burden if it benefits Oklahoma,” Wigley said. “But one industry should not be asked to carry the whole load. By spreading revenue measures throughout the economy and pairing them with reforms to ensure new tax dollars are spent wisely, the grand bargain provides a long-term solution to state budget woes.”
OIPA Chairman Berry Mullennix, an independent producer from Tulsa, said there is "no greater champion for Oklahoma than the state's oil and gas industry."
“As the economic backbone of the Sooner State, Oklahoma’s oil and natural gas producers,
still struggling from two years of lowered oil and natural gas prices, are willing to bear a greater financial burden to ensure our public schools, Department of Transportation, community health care providers and other essential state programs are funded at the highest level possible during a trying budget process," he said.
OKOGA Board Chairman Wade Hutchings noted that employees of companies that are association members work and live in the state.
"They desire a good life for their families and neighbors, including access to health care
and quality education supported by competitive teacher pay," he said. "We also appreciate the evolving reforms in Step Up Oklahoma and remain hopeful the oil and gas industry can be part of the solution to Oklahoma’s long- and short-term issues.”
Founded in 1955, the OIPA describes itself as the state's largest oil and gas advocacy group, representing more than 2,000 members in the crude oil and natural gas exploration/production industry or affiliated businesses.
Founded in 1919, OKOGA describes itself as the oldest energy trade
association in the United States.
Step Up Oklahoma is a newly formed coalition of Oklahoma civic and business leaders that burst on the state's political scene last week with a detailed proposal to resolve the state's budget impasse, increase state revenues, fund teacher pay raises and alter the structure of state and county government.
The proposal calls for raising gross production, motor fuel and cigarette taxes, while eliminating certain individual income tax deductions and loopholes. It also calls for creating an office to ferret out waste in state government.