Today marks exactly one week before Oklahoma teachers are expected to walk out of their schools and flood the state Capitol unless lawmakers pass substantial revenue to end more than a year’s worth of legislative gridlock.
It’s almost a certainty that GOP House and Senate leaders will roll out a revenue proposal this week, but whether it will draw support from rank-and-file Republicans and the two Democrat caucuses remains to be seen.
Media reports and murmurs around the Capitol indicate that some Republicans have a greater appetite than ever before to raise the state’s incentive rate for oil and gas gross production taxes from 2 percent to 5 percent. Revenue votes in November and February included GPT at 4 percent, but they each fell short. The state’s two leading oil and gas trade organizations opposed 4 percent in November but supported it in February, largely pressured by a mounting ballot proposal that could take GPT to 7 percent if no deal is struck.
House Democrats have long said that their Caucus would support a revenue package if GPT were included at 5 percent, but if that number is put on the board, will the Big Tent Party actually bring the votes?
Earlier this month House Minority Leader Steve Kouplen (D-Beggs) called that number “reasonable” considering the potential of a 7 percent ballot measure.
“I think the general public — even the teachers I have spoken to — think the gross production tax should go back to 7 (percent),” he said. “Now, realistically in this building, we’ll probably never get 7 percent gross production tax. But I don’t think 5 percent gross production tax is unreasonable. I think that’s a pretty reasonable ask in the circumstances we are in.”
“We’ve said all along that if you get to 5 percent on gross production tax, then we and House democratic leadership will do everything we can to get all 28 votes,” she said.
Everything they can? Phrasing like that implies some Democrats might be holding out even at 5 percent. That would be music to the ears of longtime activist and current Oklahoma County Democratic Party Chairman Mark Faulk who included #7orShutdown in a Sunday post on Facebook.
“I’m so disappointed in many of my fellow so-called progressives,” Faulk wrote. “Have you been brainwashed, co-opted, or are you just so beaten down and tired that you’re giving up? We’re FINALLY rising up as a state, and NOW is the time you decide to cave in to the greedy oil barons who have literally destroyed the state we love?”
Two days earlier, he wrote of the Oklahoma Education Association’s roughly $900 million revenue proposal that includes GPT at 5 percent: “The OEA Plan is the OCPA/Harold Hamm Step Up Oklahoma plan with minor edits. More regressive taxes and continued corporate welfare. Not just no, but hell no!”
‘Rally for the Rigs’
On the other side of the coin, House Republican leaders have had their own talking point about 5 percent GPT for the past year. They have claimed they can get 75 percent of their Caucus behind 4 percent — something that has not happened in two votes at that number — but not 5 percent.
Yet, mounting pressure ahead of the planned April 2 teacher walkout combined with the sudden shift of oil and gas leaders on their opposition-turned-support of 4 percent has moved the needle among some rank-and-file Republicans.
As a result, stress has fallen on House Speaker Charles McCall (R-Atoka) to greenlight a vote on a walkout-preventing revenue package that would presumably need to include GPT at 5 percent (i.e., some variation of the package OEA proposed).
If that happens, it would further pit Republicans against an oil and gas industry that helped them gain large majorities in both chambers of the Legislature.
In a March 15 email from CEO Doug Lawler, Chesapeake Energy employees were asked to consider attending an Oklahoma Independent Petroleum Association and Oklahoma Oil and Gas Association “Rally for the Rigs” event Tuesday at the Capitol.
“While our industry is supportive of paying our fair share of taxes, in addition to securing a pay raise for our teachers, we believe this burden should be subject to an equitable distribution,” Lawler wrote. “Likewise, punitive policies impairing the state’s ability to attract oil and gas investment will lead to further erosion of the state’s revenue base. While there’s no ‘silver bullet’ solution to any of these sensitive issues, we must do a better job as an industry of educating our elected officials about the benefits of a vibrant and strong oil and gas industry in this state.”
Thus, as GPT at 5 percent appears to be a component of the developing revenue package, lawmakers may have to vote for what they consider an imperfect solution this week in the face of both oil and gas workers and 7-percent-proponents at the Capitol who oppose it. If they don’t, they will face teachers days later and have to explain why they opposed a potential solution.
All in all, Oklahomans have their own version of March Madness brewing at 23rd and Lincoln.