Fallin pushes tax hikes to address budget challenges, court negates electric/hybrid revenue

OKLAHOMA CITY – Governor Mary Fallin on Tuesday (October 24) commended the state House and Senate joint committees on appropriations and budget for their support of House Bill 1035 and other measures dealing with adjusting the current 2018 fiscal year budget. Meanwhile, the state Supreme Court has negated one piece of the complicated new state revenue picture.

The Sooner State’s chief executive said: 
“These measures are part of the budget agreement that will help fill our budget hole for the current fiscal year as well as put Oklahoma on a more stable budget path and allow us to address the funding of core services going forward. The budget package provides much-needed pay raises for public school teachers, which I hope will begin a longer term commitment to our educators. It also includes pay raises for Oklahoma’s hard-working state employees as well as tax relief for low-income Oklahomans. I appreciate the support of both committees in approving these vital measures.”
In a press release sent to CapitolBeatOK and other news organizations, Superintendent of Public Instruction Joy Hofmeister state also commented on the tax hikes that passed in the legislative committees on Tuesday, calling the prospect of a public school teacher pay hike “a positive step.”  Hofmeister said: 
“Regionally competitive teacher compensation is desperately needed if we are ever to turn around this devastating teacher shortage. I am grateful for leaders at the Capitol who share this critical goal and seek to address this important investment for increasing student outcomes. The proposed teacher pay raise is a positive step in the right direction for Oklahoma education.”

In related news, Speaker of the House Charles McCall, R-Atoka, offered to hold a floor vote to raise the Gross Production Tax rate on new wells from 2 percent to 5 percent for the first 36 months if House Democrats will pass H.B. 1035 today (October 25). 
House Minority Leader Scott Inman, D-Del City, and members of his caucus have in the past supported measures such as a cigarette tax to fund health-related state government agencies, but have balked at supporting such measures without a tax hike on oil and gas. Democrats expressed opposition to the budget accord Republicans announced this week (http://www.www.capitolbeatok.com/reports/oklahoma-republican-leaders-announce-budget-deal-that-includes-revenue-increases). 
According to a press release from McCall’s staff sent to news organizations on Tuesday, the speaker “guarantees Democrats will have that opportunity [to hike oil and gas taxes] if they will pass the revenue package … , which contains numerous other items the Democratic Caucus has publicly supported including a teacher pay raise of $3,000 and a state employee pay raise of $1,000 and restoring the Earned Income Tax Credit.
“House Republicans are willing to compromise to get this budget solved for the people of Oklahoma,” said McCall. “House Democrats have demanded a vote on increasing the GPT to five percent, so here is their chance. All they have to do is pass the revenue package of items they repeatedly said they want – healthcare funding, a teacher pay raise, a state employee pay raise and restoring the Earned Income Tax Credit for low income Oklahomans. If they will pass this package, I will guarantee them a straight up vote on GPT at 5 percent on the House floor. House Republicans will be allowed to vote their conscience on the GPT bill.”

In other news, the state budget picture was complicated by a state Supreme Court decision, announced Tuesday, that slapped down fees the Legislature placed on electric and hybrid motor vehicles in the spring legislative session. Both the Oklahoma Sierra Club and Republican gubernatorial candidate Gary Richardson of Tulsa have opposed the electric/hybrid fee, both during the legislative session and in subsequent litigation. 
In a statement sent to CapitolBeatOK and other news organizations on Tuesday, Richardson said, “”I am thankful that the State Supreme Court recognized that the Motor Vehicle Fuel Tax Fee levied on hybrid and electric vehicles was an illegal tax increase.” 
NOTE: Editor Patrick B. McGuigan contributed to this report.