Oklahoma Senate Passes Tax Hike on Oil and Gas—-Industry is Disappointed

In a move that rankled the oil and gas industry, the Oklahoma Senate on Monday passed a measure giving pay raises to teachers and state workers and increased the gross production tax on oil and gas.

The vote was 37-5 in support of what the Senators called a “bipartisan revenue bill.” Senate president pro tem Mike Schulz of Altus called it one of the “most difficult, agonizing votes that you’ll ever cast in your Senate career” during the floor debate.

Afterward, he and other GOP leaders spoke about the plan.

“Our members felt like we need to make one more shot at raising revenue and giving an honest, legitimate chance to do the right thing, raise the revenue that’s necessary to put this state on better footing into the future.”

The bill would increase the gross production tax from 2 percent to 4 percent on all new wells. It would also create a $1.50 tax on cigarettes and add a 6-cent tax on motor fuel.

But the Oklahoma Independent Petroleum Association responded immediately by expressing disappointment over what the Senate did.

“In their zeal to place a greater burden on the state’s largest single taxpayer, Senators have put investment in this state’s oilfields and the jobs of working Oklahomans in jeopardy,” said Tim Wigley, President of the association.

He pointed out that the vote came just a few days after State Treasurer Ken Miller announced gross receipts to the treasury were up by double-digits for the first time in four and a half years.

“The continued attack on tax policy that has drawn billions of dollars of investment capital into the stat’es oil and natural gas industry will only reduce our state’s ability to attract new drilling and will stymie the economic growth driving treasury collections,” charged Wigley.

He also said that the original rate of 2 percent for the first 36 months of production was put in place in 2014 by legislators, some who are still in office “because they understood a growing and vibrant oil and natural gas industry equals a growing and vibrant Oklahoma economy.”

Sen. Schulz admitted he and other leaders in the Senate did not notify House leaders of the decision to vote on the measure. But he added he hoped the House “did the right thing” and would pass it.

However, the House had no plans to take up the issue on Tuesday.

 

 

 

 

 

 

If adopted, the bill would raise the oil and gas production tax rate from 2 percent to 4 percent on all new wells. It would add a 6-cent tax on motor fuel and implement a $1.50 tax on cigarettes.

The bill includes a tax hike on smokeless tobacco and low-point beer.

“This is one of the most difficult, agonizing votes that you’ll ever cast in your Senate career,” Senate leader Mike Schulz said during floor debate.

Schulz, R-Altus, is president pro tem of the Senate, its elected leader. He said that over the past week, he and House leadership have talked about which agencies might be forced to cut their budgets if new revenue isn’t found.

“Our members felt like we need to make one more shot at raising revenue and giving an honest, legitimate chance to do the right thing, raise the revenue that’s necessary to put this state on better footing into the future,” Schulz said during a post-vote news conference.

He also said it’s the last chance to fix the shortfall without cuts. Among those cuts could be the elimination of the state’s involvement in the ADvantage Waiver Program, which provides in-home care.

Lori Taylor and Richard Anderson both rely on ADvan

klahoma Senate lawmakers are urging the House to adopt a package of tax hikes that could fill most of the budget shortfall, provide recurring revenue and pay for teacher and state employee salary increases.

The bill is considered by the Senate to be the “last chance” for lawmakers to avoid raiding the state government’s piggy bank and cutting the rest.

The measure adopted Monday is virtually identical to other proposals considered during the special session, but so far it is the only one to get this close to becoming law. If the House can muster 76 votes for its approval, it would be eligible for the governor’s signature.

Gov. Mary Fallin endorsed the bill after the bipartisan vote; just five Republican senators voted against.

If adopted, the bill would raise the oil and gas production tax rate from 2 percent to 4 percent on all new wells. It would add a 6-cent tax on motor fuel and implement a $1.50 tax on cigarettes.

The bill includes a tax hike on smokeless tobacco and low-point beer.

“This is one of the most difficult, agonizing votes that you’ll ever cast in your Senate career,” Senate leader Mike Schulz said during floor debate.

Schulz, R-Altus, is president pro tem of the Senate, its elected leader. He said that over the past week, he and House leadership have talked about which agencies might be forced to cut their budgets if new revenue isn’t found.

“Our members felt like we need to make one more shot at raising revenue and giving an honest, legitimate chance to do the right thing, raise the revenue that’s necessary to put this state on better footing into the future,” Schulz said during a post-vote news conference.

He also said it’s the last chance to fix the shortfall without cuts. Among those cuts could be the elimination of the state’s involvement in the ADvantage Waiver Program, which provides in-home care.

Lori Taylor and Richard Anderson both rely on ADvantage. They both use

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