Tuesday, November 07, 2017

House does reboot on $454M tax increase, floor vote tomorrow



Yesterday, the State Senate passed HB1035X in a manner that brought up constitutionality questions (I posted on that here). Rather than proceeding down a road that could result in another Supreme Court ruling it unconstitutional, the State House decided today to avoid those issues, and do a "reboot" of the measure.

Here's what Majority Floor Leader Jon Echols (R-OKC) said on Twitter:

From State Rep. Josh Cockroft (R-Tecumseh):
Yesterday the Oklahoma Senate heard HB1035 which had passed off the House Floor two weeks ago. This bill included a cigarette tax, a motor vehicle fuel tax, and an alcohol tax. They added language including a 4% Gross Production Tax on the Senate Floor and passed it 37-5. This essentially made it the same bill which I voted for in the Budget Committee last week(HB1054), but failed to gain enough support in that committee.

This is where it gets tricky: Questions of constitutionality were immediately raised since a revenue raising bill must start in the House. Because HB1035 passed from the House with 54 votes, but failed to gain the required 76 votes a revenue raising measure must have, constitutionally it wasn’t viewed as a revenue raising measure. Instead it would have gone to the ballot for the people to vote on. When the Senate changed the revenue raising language and voted it through with over the 75% required, it called into question the legality of advancing the bill any further.

Today during negotiations between the Governor, Senate, and House an agreement was reached not to hear HB1035 in the House. Instead, HB1054 with the exact same language as HB1035 as passed by the Senate, would be brought up again in the House budget committee and moved forward.


The language from HB1035X was placed into HB1054X (which deadlocked in a tie during committee vote on October 27th), and the Joint Committee on Appropriations passed the measure 19-6. The measure will now be taken up on the House floor tomorrow.

HB1054X is projected to bring in $455M in taxes annually, and $140M for the remainder of the current fiscal year:

  •  Cigarette tax increase: $243.5M annually
  • Mixed beverage tax on low-point beer: $14.5M annually
  • 6-cent increase on gasoline and diesel tax: $170.4M annually
  • GPT increase from 2% to 4% after 36 months: $13.4M annually
  • Miscellaneous tobacco taxes: $12.9M annually
  • TOTAL = $454,859,000 annually

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