Fallin, state leaders announce budget compromise

[SoonerDave]

Governor Mary Fallin and legislative leaders have announced some sort of budgetary compromise to help solve the state's budget crisis.

It appears the agreement includes a combination of changes to the Gross Production Tax and increases to the state motor fuel tax. The GPT changes appear to include a reduction from 36 months to 18 months in the time before a well is opened and taxed at the 7% rate over the more favorable 5% rate. Other details were not discussed.

Leaders indicate a vote on the package is apparently set for tomorrow (17 May).

[FighttheGoodFight]

I'm watching the press conference. Is there a link to actual bill anywhere?

[SoonerDave]

I'm watching the press conference. Is there a link to actual bill anywhere?

Not that I've found. I wish they'd talk more details. Some lady at the press conference is more or less ranting at the conference speakers and not really helping information get out.

I get the impression there may also be a cigarette tax increase as well in this package.....

...and not one outlet has a link to a document or a bill or anything that I've found. GRRRR.

[FighttheGoodFight]

Not that I've found. I wish they'd talk more details. Some lady at the press conference is more or less ranting at the conference speakers and not really helping information get out.

I get the impression there may also be a cigarette tax increase as well in this package.....

...and not one outlet has a link to a document or a bill or anything that I've found. GRRRR.

Fallin (paraphrased from presser): Cigarette tax 215 million, 177 million gas tax, on top of 60 million on other small fixes.

That is only 400 again. So I don't really know where the other 400 is coming from?

[SoonerDave]

These are numbers I'm typing in rapidly as I hear Fallin recite them, so forgive if they're wrong:

New expected revenue:
$124 M cigarette tax
$250 M fuel tax

[FighttheGoodFight]

These are numbers I'm typing in rapidly as I hear Fallin recite them, so forgive if they're wrong:

New expected revenue:
$124 M cigarette tax
$250 M fuel tax

Those might be better than my guesses. I couldn't understand her and she also said the wrong numbers three times.

[FighttheGoodFight]

Inman about to speak but News9 and KOCO cut the feed.

I assume we will know more tomorrow.

[Zuplar]

Talk about transparency.

[jerrywall]

From what I read, there's no deal. Even though it does include at least a partial increase in the GPT rate for new wells, Inman has said Dems won't support this. So unless some of them cross aisles, this is DOA.

[jompster]

Makes sense. The people who are going to hurt the most from this are low income Oklahomans if it passes. Why am I not surprised?

The GPT change is a good start I think.

[FighttheGoodFight]

What is the vote count needed to pass this budget? I thought the GOP had a super majority?

74 gop 26 dem

[gopokes88]

http://newsok.com/article/5549409?ut...n=NIC-Facebook

Link to more details

[onthestrip]

The GPT "compromise" that moves the time we tax 2% from 36 months to 18 months is a joke. A) it brings in nothing for this years budget. Zero. B) it's still shows that state republicans will try every gimmick, every other tax increase, nearly all of which are regressive, before they make oil companies pay a measly 5%.

Ask yourself, do you want to pay higher taxes at the pump, cig taxes, taxes on your cable, tax on transferring car to child all while no one will consider raising the biggest sweet heart GPT rate in the country?

[SoonerDave]

The GPT "compromise" that moves the time we tax 2% from 36 months to 18 months is a joke. A) it brings in nothing for this years budget. Zero. B) it's still shows that state republicans will try every gimmick, every other tax increase, nearly all of which are regressive, before they make oil companies pay a measly 5%.

Ask yourself, do you want to pay higher taxes at the pump, cig taxes, taxes on your cable, tax on transferring car to child all while no one will consider raising the biggest sweet heart GPT rate in the country?

Let's temper the "screw the oil companies" rhetoric with the real-world knowledge that those evil oil companies employ real, live, actual human beings who buy groceries, pay rent, income taxes, and otherwise participate in the economy. If we tax them into an uncompetitive environment, and they leave, we can feel great about screwing the oil companies, but it won't be much solace to the folks who will be out of jobs.

I'm *not* saying oil taxes shouldn't be part of this solution, not saying ANY political ox shouldn't be on the table for goring. And I'm not interested in some protracted debate about the oil tax issue. I'm just pointing out that real, working people are on the other end of those oil taxes, regardless of your or their political affiliation. I wish the budget situation were that simple.

As far as I'm concerned, bad or good, at least *someone* put *something* out there to start discussing. It could have been a starting point. But it was beaten down by politics as usual, so now we're back to nowhere with a $900M budget hole, and now a special session to try and solve it.

[stile99]

The "worship them or they might leave" argument sounds really hollow when we're proposing to raise their rates, but those rates would still be well below what they pay to any other state. Plus, this ignores the HUGE elephant in the room...the oil's still here. They could pull up stakes and move to New Hampshire if they wanted, I hear New Hampshire is THE place to incorporate. But the wells there would be a touch dry.

Please, don't take my word for it. Take the oil industry's own words:

https://stateimpact.npr.org/oklahoma...ould-tax-them/

But at least one large, high-profile energy company — Tulsa’s Kaiser Francis Oil Company, helmed by billionaire George Kaiser — says taxes don’t play a major role in companies’ decisions to drill. In March 2014, Kaiser CFO Don Millican told StateImpact, “Severance tax rates never make a difference in that decision. They just don’t. People are drilling where the hydrocarbons are. Where the hydrocarbons are, in sufficient quantities, it makes sense to drill.”

Kaiser himself echoed the same sentiments to The Oklahoman in a separate story:

“In addition to the fact that I think it has desperate consequences to the state, which is already suffering an inability to fund state services, I am absolutely confident that the rate of gross production or ad valorem in a state within a reasonable range of 0 to 12 percent has no bearing whatsoever in the economic activity in a state,” Kaiser said.

I do agree, the rhetoric needs to be tempered, but the only one I see saying "screw the oil companies" and calling them "evil" is your post. The other posts are simply asking we tax them at a reasonable rate, a rate that again is way less than other states, a rate that would almost single-handedly fill the budget hole. So yes, please, I completely agree, let's not have that here, let's discuss the actual topic.

[gopokes88]

The GPT "compromise" that moves the time we tax 2% from 36 months to 18 months is a joke. A) it brings in nothing for this years budget. Zero. B) it's still shows that state republicans will try every gimmick, every other tax increase, nearly all of which are regressive, before they make oil companies pay a measly 5%.

Ask yourself, do you want to pay higher taxes at the pump, cig taxes, taxes on your cable, tax on transferring car to child all while no one will consider raising the biggest sweet heart GPT rate in the country?

Just because you aren't getting your way doesn't mean it's a joke. Cutting the timeframe in half is still a tax increase. At 19months the tax rate is now 7% instead of 2%.

[FighttheGoodFight]

I'm reading a lot of these last minute measures to get revenue in will most likely not hold up in court since they did not go through the committee process and contain more than one item.

Our legislature can't even introduce bills right.

[d-usa]

Our legislature hasn't been able to stick to the "one subject" rule since it was implemented.

[onthestrip]

Let's temper the "screw the oil companies" rhetoric with the real-world knowledge that those evil oil companies employ real, live, actual human beings who buy groceries, pay rent, income taxes, and otherwise participate in the economy. If we tax them into an uncompetitive environment, and they leave, we can feel great about screwing the oil companies, but it won't be much solace to the folks who will be out of jobs.

I'm *not* saying oil taxes shouldn't be part of this solution, not saying ANY political ox shouldn't be on the table for goring. And I'm not interested in some protracted debate about the oil tax issue. I'm just pointing out that real, working people are on the other end of those oil taxes, regardless of your or their political affiliation. I wish the budget situation were that simple.

As far as I'm concerned, bad or good, at least *someone* put *something* out there to start discussing. It could have been a starting point. But it was beaten down by politics as usual, so now we're back to nowhere with a $900M budget hole, and now a special session to try and solve it.

I didn't say screw the oil companies, I said have them pay 5%, that's 2% less than Texas. Still a great deal, plus Oklahoma doeasnt add ad valorem taxes on rigs like Texas does. If 5% in Oklahoma is screwing them, then it's highway robbery in Texas.

[onthestrip]

Just because you aren't getting your way doesn't mean it's a joke. Cutting the timeframe in half is still a tax increase. At 19months the tax rate is now 7% instead of 2%.

This deal does nothing for this years current billion dollar deficit. Also, it still allows a huge portion of the wells total output to not get taxed at a standard rate (most oil comes out very early in a wells life, then tapers off quickly). If we want to close the deficit, we need to tax the oil at a decent rate from day one. And by decent rate, I mean 5-7%, still below every other state that has oil under them.

[HangryHippo]

I didn't say screw the oil companies, I said have them pay 5%, that's 2% less than Texas. Still a great deal, plus Oklahoma doeasnt add ad valorem taxes on rigs like Texas does. If 5% in Oklahoma is screwing them, then it's highway robbery in Texas.

Exactly. I'm missing where 5% tax screws the O&G companies.

[Jersey Boss]

This proposal would be similar to a restaurant charging 20 cents for the first beverage and 50 cents for refills. It would seem to this tax payer that the proposal is backwards. Good fiscal policy would be to encourage the continuation of an existing well by provideing a lower tax rate to continue the operation on the back end, not up front.

[BoulderSooner]

This proposal would be similar to a restaurant charging 20 cents for the first beverage and 50 cents for refills. It would seem to this tax payer that the proposal is backwards. Good fiscal policy would be to encourage the continuation of an existing well by provideing a lower tax rate to continue the operation on the back end, not up front.

The huge majority of costs on a well come up front in the drilling and set up. The idea is for the company's to be able to recoup their cost as quickly as possible so that they can drill again. There is not bunch cost to keep a well operating.

[HangryHippo]

The huge majority of costs on a well come up front in the drilling and set up.

Then it serves to reason that is when the tax should be levied so the state benefits from having those resources extracted.

[checkthat]

Then it serves to reason that is when the tax should be levied so the state benefits from having those resources extracted.

No, Nick. It is like when you buy a TV or a lawn mower. Most of those costs are up front so they let you skate on the 8% sales tax for a few years so you can save up for your next purchase. Oh wait...