The state’s two largest oil and gas trade associations — OKOGA and OIPA — have sent Gov. Mary Fallin a letter blasting a “Fallin-Inman tax plan” that reportedly includes a proposed increase to Oklahoma’s gross production tax.
In the letter, the Oklahoma Oil & Gas Association and the Oklahoma Independent Petroleum Association note that the past two years have featured the state removing tax incentives that supported the industry.
The most recent tax increases were implemented just two months ago — HB 2377 and HB 2429 — and will provide Oklahoma with an additional $141 million in tax revenue.
It is a shame that after job creators put their capital to work in Oklahoma, they are then punished by the state.
Unfortunately, the most recent Fallin-Inman tax plan that was presented to legislators during the first week of special session called for another increase in GPT. This is no “grand bargain.”. You are now targeting the initial rate of the permanent two-tiered GPT structure, which has kept Oklahoma competitive during persistently low commodity prices and attracted the current robust exploration and drilling activity.
The letter, signed by OKOGA president Chad Warmington and OIPA president Tim Wigley, says it is “disheartening” that messages coming from the Capitol are not discussing how oil and gas companies have put “their limited capital back to work in Oklahoma” and have created 5,000 energy jobs this year.
OKOGA and OIPA are writing you today to make clear that we adamantly oppose a fourth round of tax increases on the oil and natural gas industry. The constant threat and chatter of such action is putting at risk industry investment in Oklahoma going into 2018. It also puts at risk the livelihoods of countless toolpushers, roughnecks, pipeliners, and other oilfield workers, as well as indirect jobs in manufacturing, retail, IT, and more.
Economists have called our state’s economic recovery “slow” and “driven by the energy sector.” It’s time to stop threatening the one industry driving our state’s new job creation and overall economic recovery.
House Minority Leader Scott Inman (D-Del City) has said his caucus will only support a grand bargain tax plan that includes taking the GPT incentive rate from 2 percent to 5 percent.
At a press conference toward the end of the 2017 regular session, Warmington and Wigley joined other business leaders calling for a budget agreement that would have raised the incentive rate to 3 percent.
Discussions around a 4 percent figure ultimately stalled.
‘That is highly offensive’
Fallin’s chief of staff, former Speaker of the House Chris Benge, sent an email response to Warmington, Wigley and a handful of others criticizing the OKOGA and OIPA letter. Parts of the email were shared with NonDoc.
“We take your letter seriously, but it is disappointing that you are engaging in demagoguery by calling it the Fallin-Inman plan. That is highly offensive,” Benge reportedly wrote. Multiple people confirmed the statement.
Earlier in the email, Benge argued that “the governor has been the biggest supporter of your industry over the last several years.”
Benge said he was “happy to oblige” a meeting between industry leaders and the governor.
Michael McNutt, Fallin’s communications director, said Benge’s email would suffice as the governor’s response but declined to provide it in full.
Benge did not return a text message on the topic.