Looking to fill a $215 million budget hole, Oklahoma House and Senate committees passed Tuesday a second run at a $1.50 per pack cigarette tax increase, but it probably doesn’t have the votes to pass both chambers.
Three distinct factions have emerged in the legislature: Those supporting the cigarette tax on its own, those supporting it as one piece of a package of revenue measures and those against the legislature raising taxes at all.
Senate Appropriations and Budget Chair Kim David is among those urging lawmakers to pass the cigarette tax now.
"If this bill isn't passed this week — for the cigarette tax — and it's not signed by the governor by Oct. 2, then we will not be able to get revenue until Feb. 1, which is an additional loss of $21 million," David said.
Rep. Eric Proctor said he’s disappointed Republicans haven’t worked on a broader revenue package with Democrats, and he doesn’t think the cigarette tax will get the 76 votes it needs to pass the House when it's heard Wednesday or Thursday.
"If you will support raising the gross production tax, restoring it to the historic Oklahoma rate, we'll help you. We'll be with you. That's bipartisanship," Proctor said. "Only putting up one side of the argument over and over again for a vote when you know the votes aren't there is, at best, disingenuous, and we're going to be wasting taxpayer money every day that we're here."
Republican leaders said the cigarette tax is the first step and other revenue measures will come later. Senate President Pro Tem Mike Schulz's plan calls for a gas tax increase and the end of a sales tax exemption for wind equipment manufacturers.
Rep. John Bennett said lawmakers should be auditing cash-strapped agencies and finding cuts.
"And then if there is a need, let's send it to a vote of the people and let them decide. Let's be accountable, hold the agencies accountable, and let's do the right thing for our citizens," Bennett said. "And the right thing is not to raise their taxes."
There have also been questions about how this cigarette tax bill is structured. Revenue collected this year would go to the general fund, and revenue next year would go to a health care enhancement fund, which lawmakers would appropriate.
The cigarette tax found unconstitutional by the Oklahoma Supreme Court allocated revenue directly to several health-related agencies.
Public support for the cigarette tax is at 60 percent of Republicans and 65 percent of Democrats. If it’s dedicated to health care, support jumps to 75 percent.
