House Democrats praise Oklahoma High Court’s Decision allowing ballot initiative circulation to increase gross production tax rate
Published: March 20th, 2018
OKLAHOMA CITY – Several state House Democrats have responded to an Oklahoma state Supreme Court decision issued Monday (March 19) that allows an initiative petition to restore the gross production tax (GPT) to pay for education costs to proceed.
State Question 795, as the proposal is designated, would increase the GPT tax rate from the present level of 2 percent. The measure would, according to a press release from House Democratic staff, “restore the gross production tax back to 7 percent on all oil and gas wells. The restoration of the gross production tax will bring in an additional $340 million.
A portion of this revenue would then be used to fund a $4,000 teacher pay raise and provide funding for other costs related to public education.”
“This initiative represents the last stand for teachers,” said Minority Leader Steve Kouplen, D-Beggs. “In the absence of a substantial revenue package that restores funding to education, provides needed raises to teachers, support staff and state employees, this state question will give the people of Oklahoma an opportunity to increase funding for education by ensuring oil and gas companies pay their fair share.”
According to the staff press release, “The Supreme Court’s decision doesn’t just signal a “plan b” for teacher pay raises. It also offers leverage to allow the Legislature to move on gross production and pass a more complete revenue package that addresses inadequate state agency funding and low teacher and state employee pay.”
Last week, officials with the Oklahoma Education Association (OEA, the Sooner State’s largest labor union) rejected a Republican-backed proposal for a $5,000 teacher pay increase, and $2,500 for other government employees. Although activists pressed for a $5,000 hike through the “Step Up” plan early in the current legislative session, union leaders now says a $10,000 pay hike is needed.
However, leaders allied with the unions have characterized recent legislative majority proposals more favorably.
As for Monday’s development, in response to Monday’s state High Court decision, state Rep. David Perryman, D-Chickasha, said, “The time is now. The oil and gas industry has spent millions of dollars to keep the gross production rate at 2 percent. Now, they are staring down the barrel at 7 percent. Surely, with this added pressure on the industry, the Republicans inside the Capitol can come to the table and agree to a revenue package that includes a gross production tax of at least 5 percent.”
In the debate process, some energy executives have said the higher rate could trigger layoffs or other cost-cutting measures.
“Restoring the gross production tax isn’t about punishing oil and gas,” said Rep. Eric Proctor, D-Tulsa. “This is about restoring funding to rural health care so we can stop the closure of rural hospitals. This is about ensuring teachers in Oklahoma don’t have to take multiple jobs to provide for their family. This is about the Department of Corrections being able to hire more correctional officers so prisons are adequately staffed. This is about doing what is fair and what is right for the people of Oklahoma.”
The House Democratic press release asserted, “Although restoring the gross production tax doesn’t bring in enough revenue by itself to shore up the state’s financial woes, it does provide a key element to a revenue package that could.”
Rep. Kouplen said in the release Tuesday (March 20), “Since early last year, our caucus has said we will not support a revenue package that continues to shift the tax burden in this state from the wealthy to working-class Oklahomans. If Republicans are serious about wanting to fix this problem, now is their opportunity. Lawmakers will never have a better chance than this moment to negotiate a deal that fairly increases revenue to restore funding to state agencies and provide an opportunity to raise the pay of teachers, educational support staff and state employees.”
NOTE: Editor Pat McGuigan contributed to this report.