Despite lobbying efforts from the state’s two major oil and gas groups, the teacher pay raise bill has won approval in the House and Senate and Governor Mary Fallin only awaits the amended version to make it law.
The bill in question, HB1010 will produce an estimated $474 million, not the $447 million as reported throughout the week by numerous news organizations. It will increase the gross production tax on oil and gas to 5%, a move that the State Tax Commission estimates will produce another $170,485,000 for the state.
The Oklahoma Senate voted 36-10 Wednesday night but removed the proposed $5 hotel-motel room tax that was fiercely fought by the state’s hotel and motel industry. Their voices were heard while those of the oil and gas industry were not heard by legislators.
The tax commission breakdown of additional revenue showed the impact of raising the GPT to 5% will include a $99,365,000 increase in oil collections and an increase of $71,120,000 from natural gas collections.
Most of the more than $99 million from the oil GPT will go toward the general revenue fund. The total of 96.25% will be $95,638,813.
More than $3.2 million or 3.28% will be apportioned to the County Bridge and Road Fund. Less than half a percent or $467,015 will go to the Statewide Circuit Engineering District Revolving Fund.
Of the more than $71 million in additional revenue from the GPT on natural gas, all of it will go to the General Revenue Fund.
Drivers will pay more too because the bill increases the motor fuel tax by 6 cents a gallon on diesel fuel and 3 cents per gallon on gasoline. The Tax Commission estimates the move will produce another $51,979,000 on gasoline purchases and $534,004,00 more from purchases of diesel fuel. All of the funds from the motor fuel tax increase will go direct to the General Revenue Fund.
The State Senate held no debate in approving the tax hike, the largest in state history. At one point, only 35 senators favored the bill but 36 votes were needed. Sen. David Holt, the newly-elected mayor of Oklahoma City had to rush quickly back to the Senate to cast his vote in support of the bill.
Gov. Mary Fallin hailed the passage calling it an historic evening for the state.
“I applaud the bipartisanship shown in the Senate and in the House of Representatives earlier this week by passing House Bill 1010XX. Those voting yes answered the call from the public by voting teachers a pay raise and putting the state on a solid foundation for the future,” she said in a press release.
She promised to sign the measure.
“I appreciate our lawmakers putting people over politics by approving this package of revenue.”
The House met Thursday and spent 5 hours awaiting the arrival of one member who had to be produced by a state highway patrol trooper. Even though it convened at mid-morning, the House waited until nearly 2:30 p.m. before passing the amended version and its emergency.
However, Rep. Scott Inman (D-Del City) voiced opposition as well as anger toward the Senate for removing the $5 hotel-motel tax.
“We’ve capitulated to the State Senate,” he said, adding that the plan is now “$75 million upside down.” Inman said the removal of the hotel-motel room tax cut $50 million out of the original bill to fund the teacher pay raises. The Democratic lawmaker also said the Senate on Thursday indicated it would not support a $22 million ball and dice move affecting Indian casinos.
“If they’re going to support all these pay raises, they need to show us where to get the money. We’re literally doubling the budget hole to appease the Senate,” he told the House.
Despite the approval of the measure that will give teachers an average pay raise of $6,100, the Oklahoma Education Association indicated it planned to go ahead with a scheduled statewide walkout on Monday. But as some news organizations reported on Thursday, the OEA did not know what it wanted in terms of more money.