State GOP Lawmakers Pass Tax Bill Dems Call "Unconstitutional"

With just four days left to pass a budget, a legislative committee passed an oil and gas tax plan to raise about $95 million. Opponents say the measure is unconstitutional, and will just leave the state deeper in the hole.

Legislative leaders left the Capitol just before midnight Tuesday after postponing a budget meeting five times before finally holding it, giving lawmakers just a few minutes to look over bills before voting on them.

In an attempt to bridge the state’s nearly $900 million budget deficit, Republicans passed a bill on gross production tax.  That’s the tax on oil and gas production on new wells. Republicans wanted it to stay near the current two percent; Democrats want it raised to seven percent.  So Republicans passed a bill to raise the gross production tax to 4 percent on certain wells.  But the bill came after the deadline for passing revenue raising measures.

“This, by nature, is a revenue raising measure and I’m just trying to figure out how we’re getting around the constitution that says that we cannot have revenue raising measures in the last five days of session,” said Rep. Jason Dunnington (D-88.)

Rep. Kevin Wallace (R-32) responded, “This is just modifying the incentive rate so it’s not an increase in the tax rate.”

If that’s the case, Republicans would not need bipartisan votes to pass the bill.

“This bill does not get us where we need to get,” Dunnington argued. “The original incentive for drilling horizontal wells that was given two decades ago was done for that factor, to incentivize drilling horizontal wells.  Now, 95 percent, 96 percent of the wells that are drilled are horizontal. The incentive has worked.”

House Minority Leader Scott Inman (94) added,  “When the public cried, cried out loud to go from two percent to five or seven, this legislature said we’ll just leave it at two."

The bill now goes before the full House of Representatives.

Meanwhile, the committee did not pass a bill that would have cut down on unnecessary swag, like pens, coffee cups, coasters, and trophies.  The swag budget is around $29 million.