OKLAHOMA CITY (AP) — An Oklahoma oil and gas industry group has challenged a proposed state question that seeks to give teachers a $4,000 pay raise by equalizing gross production taxes on oil and gas wells.
The Oklahoma Independent Petroleum Association filed two challenges Wednesday with the Oklahoma Supreme Court against State Question 795. The association's filings argue that the proposal is unconstitutional because it addresses numerous general subjects and is unclear, and that the petition uses biased language.
"A pay raise for Oklahoma teachers is popular," but the state question "is constitutionally deficient because it logrolls other distinct subjects into the proposed constitutional amendment, including a gross production tax increase and changes to the separation of powers," the filing said.
The question seeks to raise the rate on new wells from 2 percent to 7 percent. Restore Oklahoma Now Inc. is spearheading the petition and hopes to gather enough signatures to get the issue on the November ballot.
The current tax structure charges operators of oil and natural gas wells dug after July 1, 2015, to pay a 2 percent gross production tax on the well's product for the first 3 years of operation. The tax rate then increases to 7 percent for the remainder of the well's operation.
The tiered system encourages continued investment in the state's oil and gas fields, said Tim Wigley, president of OIPA.
The association also alleged that the petition uses biased and misleading language that may sway the decision of potential signers.
The Oklahoma Tax Commission estimates the measure would raise $333 million in a year, said Mickey Thompson, the executive director of Restore Oklahoma Now. About $240 million will be used for raises, while the additional funds would be spent to hire new teachers and to fund early-childhood education, he said.
Thompson said the group wasn't surprised by the legal challenge, but are disappointed by it.