With the demise of the Cigarette tax settling in, House Democrats have ramped up the rhetoric for hitting the Republican's favorite benefactor with a massive new tax increase. Several of the House Democrats are returning to their original demand of 7% tax on all oil production (off the top). This is in addition to a corporate income tax on all profits, after expenses. Some legislators are highly skeptical of the tax increase bringing in any more than $100 million, because of market fluctuations, wells going off the 3-year discount, and new drilling on the decline.
Last May the Democrat leaders were willing to compromise with a 5% GPT on all new wells. That would have netted the state about $125 Million in additional revenue. Instead, the Republicans went after smokers and car buyers. But without any Democrats, the Republican majority did not acquire the 75% needed to comply with the constitutional mandates. If the Democrats did get their acceptable concession on Gross Production Tax, there may be another tax imposed. Perhaps a fuel tax.
The House (or Senate) does have one other option.. They could simply raise no taxes at all. It would precipitate the need for either ending much of our state's healthcare functions. But there is the option to pass an amended budget whereby the legislature directs that money be moved from other agencies so that the cuts are borne more broadly and less drastically.
And yet we still do not know how the high court will rule on the other tax lawsuits. Those rulings will also be instructive to the legislative process.
David Van Risseghem is the Publisher of SoonerPolitics.org. The resource is committed to informing & mobilizing conservative Oklahomans for civic reform. This endeavor seeks to utilize the efforts of all cooperative facets of the Conservative movement...