Big revenue bill goes down in the Oklahoma House

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Despite bipartisan support from the Oklahoma Senate, endorsements from two former Democratic governors, backing from Gov. Mary Fallin and pleas from dozens of advocacy organizations, the Oklahoma House of Representatives failed to pass a grand revenue bill this afternoon.

Members voted 71-27 for HB 1054X, but that fell short of the 76 votes necessary for revenue-raising measures under the Oklahoma Constitution. In 1994, voters approved that requirement, which has been a massive hurdle for a modern Legislature facing yearly budget shortfalls.

The vote came during the seventh week of special session and after more than two hours of questions and debate on the House floor Wednesday.

“To hear we have to hurry and do this and get out of here doesn’t make me very happy,” Rep. Lewis Moore (R-Arcadia) said in debating against the bill. “We have a fragile oil industry just coming up, and we’ve all been coming in and out of a recession since 2009. It’s been a long, hard row. I just cannot see standing on the backs of people who can’t afford.”

Rep. Tim Downing (R-Purcell) criticized the fact that letters were sent out to vulnerable Oklahomans receiving state services, scaring them that their services would be cut. He also discussed oil and gas companies.

“I’m tired of people beating up oil and gas,” Downing said. “They’ve been treated very poorly.”

Other Republicans voted for the bill.

“All this talk about gross production tax is just that — it’s gross. It’s gross,” said Rep. Marcus McEntire (R-Duncan) in debate for the bill. “This bill is far from perfect, but you know what? I don’t think the people expect perfect. They want solutions, and they want them in a bipartisan manner.”

Rep. Leslie Osborn (R-Mustang) noted to members that “pro-life doesn’t end when the baby leaves the uterus.”

“A green vote today means you honor and respect our teachers,” Osborn said. “A green vote today means you love the children and the future of our state. (…) If you vote red in the House and the Senate, you don’t care about any group we said. To the people of Oklahoma, vote us out if we vote red.”

More than 75 percent of Democrats voted in favor of the bill.

“The public has lost confidence in our ability to do anything,” said Rep. Jason Dunnington (D-OKC). “This bill is not perfect, but it’s a step. And right now, our citizens are asking us to take that step.”

But Rep. Eric Proctor (D-Tulsa) debated and voted against.

“This bill is neither grand, nor is it a bargain,” Proctor said. “That’s a 30 to 1 regressive tax, folks. If you think that’s compromise, I highly advise you never try to buy a used car.”

The amended bill in the Senate includes the following revenue provisions:

• a $1.50 tax on cigarettes
• modifications to tax stamp rules on cigarettes
• tax rate modification on “little cigars”
• a new tax on chewing tobacco, smokeless tobacco and snuff
• a $0.06 increase on the gas and diesel tax
• and a change to the taxation of low-point beer
• an increase in the gross production tax incentive rate from 2 percent to 4 percent

The revenue bill had been the trigger necessary for a $3,000 teacher pay raise, a $1,000 public employee pay raise and the restoration of the earned income tax credit’s refundability.

How they voted

How we got here: Special session background

Gov. Mary Fallin called for the Legislature to convene in special session on Sept. 25. Her directive asked lawmakers to fill a $215 million budget hole that was created when the Oklahoma Supreme Court ruled that a new “cigarette fee” was unconstitutional. She also encouraged legislators to find a way to fund a teacher pay raise, stabilize the state’s budget and seek efficiencies in government.

After weeks of negotiations, Fallin, McCall and Senate President Pro Tempore Mike Schulz (R-Altus) announced a revenue agreement between the three of them that Democrats declined to support because it did not include a gross production tax increase. As that vote occurred, House Minority Leader Scott Inman (D-OKC) announced he would resign in January. The next day, Schulz and the Senate passed a unanimous resolution calling for the House to add a gross production tax increase into the revenue bill.

More than a week after the House let that bill stall in a Joint Committee on Appropriations and Budget meeting, the Senate amended a House bill to add GPT into the revenue package, passed it and functionally forced the House to consider the bill.

It passed JCAB on Tuesday by a 19-6 vote.

(Update: This piece was updated at 6:37 p.m. to clarify a percentage of Democrats who voted for the bill.)

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