"Hail Mary" Revenue Plan Fails in the House

Oklahoma Governor Mary Fallin, along with Senate President Pro Tempore Mike Schulz and House Speaker Charles McCall, announced a budget agreement that involves a $400 million tax increase Tuesday, May 16.

A key Senate panel is preparing its version of the state budget amid indications that further belt-tightening may be needed. That means the House and Senate are still at odds about how to fix the state's gaping budget hole of nearly $900 million.

State analysts downgraded anticipated revenues for the next two fiscal years by $1.46 billion - almost $600 million next fiscal year and $865 million in 2018-19 - largely because of eroding income tax receipts.

"[The projections] underscore the fact that it's a tax cut, and secondly it underscores the fact that this governor and the Senate are committed to the growth that these bills will produce", he said.

"It can't happen soon enough for us, but it's got to be the right deal for taxpayers", said Brady, a Bloomington Republican.

McCall said 75 percent of his GOP members support raising the cigarette and gasoline taxes, but he'll ultimately need Democratic support to push any measure through.

In his budget proposal, Gov. Charlie Baker recommended applying the state's room occupancy tax to anyone who provides 150 days or more of accommodation in a calendar year, which he estimated would generate $12 million in fiscal 2018.

There are also indications that the added fuel tax would not find favor with the House of Representatives.

"I made a mistake", said Osborn, who came to the Legislature nine years ago as a tax-cutting zealot but has learned the errors of those choices.

Just last month, Senate Majority Leader Mitch McConnell, R-Ky., said: "Regretfully we don't expect to have any Democratic involvement in" a tax overhaul.

"Some have argued this program goes well beyond any kind of tax credit program and instead is something that is closer to a cash payment to these individuals", said Rep. Chris Davis of Ellington, ranking House Republican on the Finance, Revenue and Bonding Committee.

The Senate budget also funds a low-income clothing allowance at $300 per child.

The Senate budget plan, like the House's, ignored Baker's proposal to put growth caps on the rates health care providers can charge for medical services in an effort to control the cost of care in the commercial market and make it more affordable for employers.

The caucus plan would eliminate entirely a sales tax revenue-sharing plan that is supposed to send $340 million to $350 million in each of the next two fiscal years to cities and towns.

Fasano said the magnet schools cut was hard but, "When we get down to these big numbers, you've got to look at things that normally you would not look at". But the Oklahoma Tax Commission estimates the increase would raise just $20 million in additional revenue next year. "There's a bunch of things on this list that I wish we could do differently".

Hurst said small businesses support the idea of cooperatives, which were first authorized in the state in 2010 but became less attractive financially after the Affordable Care Act changed the rating factors used to set premiums and negated much of the savings that could be achieved. "I think the time to criticize is past us", he said.

  • Joanne Flowers