"Hail Mary" Revenue Plan Fails in the House

May 17, 2017

Credit State of Oklahoma

It was a wild day at the state capitol as lawmakers tried to find new sources of revenue to fill the nearly $900 million budget shortfall and fund teacher pay raises. But, with just three days left to find new money, they’re likely back at the drawing board.

Starting about noon, there were rumors that a budget agreement had been reached between the Republican leaders in the House of Representatives and the Senate and Governor Mary Fallin. The scheduled an announcement for 2:30 p.m.

But before they could make it, House Democratic Leader (and candidate for governor) Scott Inman crashed their press conference and said there would be no Democratic votes on the bill.

Enter Governor Fallin, Speaker Charles McCall and Senate Pro Tem Mike Shulz:

"We took some of their ideas, some of our ideas, some things I don’t like, some things they don’t like, we put it all together, but somebody’s got to start somewhere with recurring revenue, not just fixing one time holes and moving this money around."

Fallin called the plan a compromise, saying everyone was involved, but admitted she hadn’t had Inman in her office to talk about it for three months.

McCall said he would bring the votes from the ‘no new taxes ever’ members of his caucus. The plan included a $1.50 per pack increase for cigarettes, an increase in motor fuel taxes at the pump of 6 cents a gallon, and they agreed to shorten the term oil and gas companies get a five percent discount on gross production taxes. The latter wouldn't take effect until next year. It all added up to about $400 million.

"There’s still some more work that will have to be done on closing the budget gap and filling that hole."

Not a complete solution, but a starting point.

The press conference ends. They all run upstairs to the House Joint Committee on Appropriations and Budget meeting, and after much debate, House Bill 2414narrowly passes.

They have to hurry, they’re running out of time. The Governor is posting pictures of a calendar with giant X’s showing the dwindling number of days left to find new money. Pause a minute, the House stops to swear in Zack Taylor, a new representative elected in special session. Republicans hope he will be a yes vote. Everyone claps.

They bring in chicken dinners, suspend the rules, and try to get a vote on the bill done Tuesday night. A contentious question and debate session lasting hours follows.

Now, remember, because of State Question 640, which is part of the constitution, revenue or tax raising bills have to pass with a three quarter majority of both houses, or they will go to the ballot for a vote of the people.

There were three factions in the House debate, creating some pretty strange bedfellows.

Republican John Bennett from Sallisaw represents the conservative Republican faction. They invoked the Republican Party Platform saying the way to close the budget gap is to shrink government.

"We need to be cutting the waste in state agencies, cut and protect is what we should do. Cut the waste and protect the vulnerable."

The House Democrats led by Scott Inman represent faction number two, even he was surprised he was on the same side as the conservative Republicans like John Bennett.

The Democrats main argument? They want it to be fair.

"Your solution, your courageous solution is to raise $400 million on the backs of middle income families and not ask the oil and gas industry this next year to offer one red cent to the bottom line."

And the last faction, the people who brought the bill. Republican Leslie Osborn says hypocrisy goes both ways. She said Republicans made a mistake, they cut too much money from the state budget to do the things that are right.

"We’re 49th in everything in this state. Obesity, smoking, educational outcomes. Are you proud of that? All you want to do is tread water. Let’s talk about it being a spending problem. Let’s listen to our conservative think tanks. Let’s go the way of Kansas and Sam Brownback. How’s that working for you?"

But Osborn’s debate didn’t make a difference. The bill passed by a vote of 51 to 46 with the conservative Republicans and Democrats aligning to vote against it.

That probably means two things.

One, if the bill does pass the Senate, it will have to go to a vote of the people, and that will be too late to make a difference in the budget year that starts July 1.

And two, a special session to deal with the budget crisis is becoming more likely with every passing minute.