The Oklahoma State Senate passed a resolution calling for an increase in the tax on oil and natural gas production. That’s been the sticking point in patching a $215 million budget hole.
The resolution does not really carry any weight, but it’s a symbolic gesture showing Senate Republicans and Democrats are ready to work together toward a solution.
The Senate passed a resolution asking the House to reconsider a bill that failed Wednesday, jacking the tax on gasoline, beer, and tobacco, but also to raise the tax on oil and natural gas production, called gross production.
“Democrats in the House have made it clear that gross production tax is extremely important to them coming on board,” said Senator Greg Treat, Majority Floor Leader. "We, in a very bipartisan manner, came to a compromise with our Senate Democrats at four percent."
Gross production has been the sticking point in the budget negotiations. House Democrats refuse to back any other tax increases without it.
News 9 asked Rep. Corey Williams (D-Stillwater), “Is there any scenario that doesn’t include gross production?”
He replied, “Not for the Democratic caucus and not for the citizens of Oklahoma.”
Governor Mary Fallin added, “Unfortunately, there's been some lines drawn in the sand and it's time to move off that. It's time to understand there are people out there hurting, people that need these services, and these are real issues that we need to deal with as a state.”
In this case, the devil is in the details. The resolution calls for a four percent increase but a press release sent out by Senate Republicans says that increase would last for 36 months. Democrats say that’s a deal breaker.
“The difference between 36 months at four percent and 12 months at four percent is over $100 million annually that can be invested in education or our crumbling infrastructure or public safety,” said Rep. Eric Proctor (D-Tulsa).
The oil industry isn’t happy with the resolution. Tim Wigley, president of the Oklahoma Independent Petroleum Association, said “We are disappointed the Senate has joined House Minority Leader Inman and his caucus in calling for increased taxes on Oklahoma’s defining industry because increasing the state’s gross production tax for new wells harms Oklahoma businesses and harms working Oklahomans.”
House Democrats don’t see it that way.
Representative Proctor explained, “You pay five percent. I pay five percent. Teachers, welders, electricians, the entire state, janitors pay five percent. If janitors can pay five percent, Harold Hamm can pay five percent.”
House Republican leaders say nothing’s changed. They say they’ve offered democrats four percent in the past and Democrats wouldn’t bite.