Monday, May 1, 2017
Rs starting to look & sound a lot like Ds!
Weekly Opinion Editorial
by Steve Fair
On Monday, the Oklahoma legislature’s Joint Committee on Appropriations and Budget met and passed HB#2365 authored by Representative Leslie Osborn (R- Mustang) and Senator Kim David (R- Porter). The bill if passed by the legislature and signed by the Governor would increase the tax on cigarettes by $1.50 per pack. Half of the money would go to the Health Care Authority Enhancement Fund and 23% would go to the Mental Health and Substance Abuse Services Enhancement Fund. HB #2365 also increases gasoline and diesel fuel tax by six(6) cents a gallon. It is estimated the two tax hikes in #2365 would generate an additional $340 million dollars in revenue for the state. I thought it was dangerous to smoke and fill up with gas? Attorney General Mike Hunter has issued an opinion that HB #2365 doesn’t violate the ‘logrolling/dual subject’ provision in the State Constitution, but the final decision on that will be up to the State Supreme Court.
The Joint Committee also considered four other revenue bills, including SB#2369, which would increase the amount of excise tax Oklahomans will pay when they tag a new vehicle. If implemented, it is expected to generate another $12 million a year into state coffers. Osborn says without the increases in HB #2365, Oklahoma will not have the funds to provide basic core services like public safety. Osborn said, “We weren’t joking when we put out the 14.5% scenarios.” Osborn said it was possible that 25% of state troopers could be laid off due to the budget shortfall.
Oklahoma state government faces a $1 billion dollar shortfall and legislative leaders are scrambling to find ways to generate revenue the only way they can- by taxing their people. It remains to be seen if legislative leadership will be able to convince enough Rs to support these tax increases. By my way of thinking, it would require a super majority (3/4) of each chamber to be legal. Here is why:
Back in March of 1992, Oklahoma voters passed State Question #640, aka The Oklahoma Voter Approval for Tax Increases Amendment. The measure required that any legislation intended to raise revenue for the support of the state government be submitted to a vote of the people before it could become effective or pass the legislature by ¾ majority. The measure also removed the authority of the state legislature to block or prevent a referendum vote on revenue issues. At the time, Democrats controlled the legislature and had since statehood. They taxed everything that wasn’t nailed down and Oklahoma’s rate of taxation per capita ranked in the top 15 among US states. Until #640, the legislature just passed tax and fee increase with a simple majority and grew government. After that pesky little SQ passed, it wasn’t as easy. Getting three fourths of a body to agree to a tax increase is a lot harder than a simple majority. SQ #640 has allowed Oklahomans to keep billions of their own money in the past 25 years that state government wanted but just couldn’t get to.
Rumor has it the current Oklahoma Republican legislative leadership believes these revenue increase bills don’t require a vote of the people or a three fourths majority and they plan to vote to approve with a simple majority on a floor vote. Clearly, they want to circumvent the spirit and intent of #640. Rest assured, if that happens, it will be challenged in court and they will likely lose.
Another one of the revenue bills that passed on Monday will eliminate $50 million in oil and gas production tax credits. Several years ago, the legislature cut gross production taxes to among the lowest in the country and as a result drilling boomed in the Sooner state. Now the legislature wants to increase the tax to the former level and eliminate drilling incentives. Minority Leader Scott Inman of Del City, a Democratic candidate for governor called for a tax increase on “the wealthiest industry in the history of the world.” What Inman fails to understand is business and industry(oil & gas included) doesn’t pay taxes- people pay taxes. Every cent of taxation piled on business is simply passed onto the consumer.
It is amazing how fickle politicians can be. When the Oklahoma oil and gas industry was generating record revenue, state government couldn’t do enough to encourage more drilling, but when the industry hit a downturn, they punish them.The disappointing thing is Oklahoma Republican legislative leadership believes the only way out of this budget shortfall is to raise revenue. “If you think this is the last revenue measure I plan to bring up, you would be sadly mistaken,” Osborn said. At what point does the GOP in the state legislature actually start to practice what they preach(and campaign on) and start downsizing government?