The fight over taxing energy in Oklahoma is far from over as indicated by debate last week in the House Joint Committee on Appropriations and Budget. It also set the stage for a full-blown repeat of the 2017 fight over what some legislators feel was a move to target the wind industry but not so much oil and gas.
HB 1033XX won approval on a 21-5 vote but only two Democrats were vote it—Rep. Jason Dunnington (D-OKC) and Rep. Ben Loring (D-Miami) while five others opposed it. The bill received unanimous support from the Republicans present.
One of the ideas suggested by Step Up Oklahoma, a $1 per-megawatt hour of electricity production by wind farms proved challenging for the legislators. So did a proposal to raise the gross production tax on oil and gas, according to the political website NonDoc.
The measure calls for an increase of the gross production tax on oil and gas wells, raising the 2 percent on some wells to 4 percent. Democrats preferred hiking the tax to 5 percent.
The bill could be voted on Monday in the House and would need 76 votes to be sent to the Senate. With 73 Republicans in the House, that means Republicans need the votes of 3 Democrats.
The idea of raising taxes didn’t set well with some Republicans.
“If I vote for this, I will certainly hold my nose and do it for the greater good,” said Rep. Todd Russ (R-Cordell) “The fuel tax makes me very uncomfortable for the middle class.”
After voting to support HB 1033XX, Russ later voted against HB 1035XX, a measure to put an $18 million cap on wind industry tax credits. The cap-bill won approval on a vote of 15-12.
The bill was carried by Bartlesville Republican Earl Sears who said the wind farms in the state will get about $70 million in credits in 2018.
“I absolutely have no problem with wind, but I truly believe that the wind credits are extremely lucrative, and we need to have some reform,” Sears said. “There is no question we made a huge mistake. We need to roll these credits in.”
As NonDoc reported, Norman Democrat Emily Virgin wondered by Republicans wanted to adopt the cap at this time.
“Why are we being retroactive now because the Step Up group asked us to?” Virgin asked.
Similar questions were raised by Del City Democrat Scott Inman, an advocate of forcing the oil and gas industry pay more than the proposed 4 percent rate and an opponent of raising taxes on the wind industry.
“How does it not hinder business growth for an entire industry in our state?” Inman asked of the wind generation tax, which House JCAB Chairman Kevin Kevin Wallace (R-Wellston) said would yield about $20 million per year starting in Fiscal Year 2019.
“Our neighbor to the south is doing incredible things with the wind industry and what it’s doing to energy prices by bringing down home-heating costs for senior citizens and middle class families,” Inman said. “I’m trying to understand why it would be the policy of a conservative House of Representatives and a chairman like yourself (…) I’m trying to figure out how this fits into fiscal conservatism.”
While Rep. Inman opposed the Step Up Oklahoma revenue plan and a cap on wind tax credits, he supported a $5 million cap on the coal industry and a $2 million cap on the railroad tax credit.