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Oklahoma Senate Passes Special Session "Grand Bargain," Putting Ball in House's Court

State Senate

 

In a late afternoon meeting Monday, the Oklahoma Senate amended a special session House budget bill to make it into a long-awaited "grand bargain" to fill the state's $215 million budget hole — then passed the bill.

House Bill 1035 was a package of revenue measures worth an estimated $183.8 million for the rest of the current fiscal year and $442.6 million thereafter. Its revenue came from a $1.50 per pack increase in the state cigarette tax, applying the 13.5 percent mixed beverage tax to low-point beer, increasing gas and diesel taxes by 6 cents per gallon, taxing little cigars as cigarettes, increasing the factory list price of smokeless tobacco products, and reducing the discount on cigarette stamps.

The Senate added a change in the gross production tax to the bill, changing the rate on new wells from 2 percent to 4 percent for 36 months. That is not in line with House Democrats' calls for 5 percent for 36 months, 4.5 percent for 18 months or 4 percent for 12 months.

House Speaker Charles McCall blamed the Senate earlier Monday for holding up revenue bills.

The Senate suspended rules to put HB1035 directly on the floor rather than send it through committee. It passed 37–5, just enough to satisfy the three-fourths majority needed for the legislature to put tax increases into effect.

Senate President Mike Schulz said the state has been talking about fixing the budget and getting away from using one-time funding for more than a decade.

"This is a historic moment of this state's history," Schulz said on the floor. "We have a decision before us to put us on a better path forward or a decision before us of more of the same."

Each Senator’s share of the $215 million dollar budget hole is $15 million. Minority Leader John Sparks told his colleagues if they’re in favor of further cuts to state government, it’s time to offer cuts from their own districts.

"Don't give us the rhetorical 'fraud, waste and abuse.' Do you want to shut down the OSU Extension Office? Do you want to take schools from four days to three? Do you want to permanently abandon bridge replacement programs?" Sparks said. "Inquiring minds want to know where in your district are you going to find $15 million of permanent, recurring cuts — not one-time. House members, it's about $10 million a district. Show us where you want those cuts to land."

HB1035 would fund a $3,000 teacher pay raise and a $1,000 state employee raise, and it would restore the Earned Income Tax Credit. Each of those actions are in separate measures.

"If we can pass this revenue package and the House can pass this revenue package, then we will pass those three measures, also," said Sen. Kim David.

The bill’s initial version didn’t get a three-fourths majority in the House last week but was still sent to the Senate, leaving that chamber free to change it.

The addition of a gross production tax increase makes HB1035 essentially the same measure as House Bill 1054, which the House Appropriations and Budget Committee failed to pass on Oct. 27. The committee voted 11–11 on the bill, so it didn't advance to the House floor.

 

Matt Trotter joined KWGS as a reporter in 2013. Before coming to Public Radio Tulsa, he was the investigative producer at KJRH. His freelance work has appeared in the Los Angeles Times and on MSNBC and CNN.