Oklahoma revenue bill fails in State House

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OKLAHOMA CITY - A revenue bill intended to fund the state of Oklahoma failed Wednesday.

House Bill 1054 failed in a 71-27 vote Wednesday afternoon.

It needed 76 votes to pass.

The revenue and taxation bill previously passed in the State Senate and and a house committee.

It would have taxed cigarettes and tobacco products at $1.50 and motor fuel at $0.06, included low-point beer in the mixed beverage tax and raised the gross production tax from 2 percent to 4 percent.

It was estimated to bring in more than $400 million in Fiscal Year 19.

Governor Mary Fallin expressed disappointment in a statement:

“I’m extremely disappointed by the House of Representatives failing to pass House Bill 1054X, which would have addressed a $215 million shortfall in our current fiscal year budget and provided a teacher pay raise.  It is discouraging that some members have chosen politics over taking care of people by refusing to vote for this budget package and have shown they are not willing to move our state forward. As a result of their no votes, our state will not have enough funds for agencies to deliver services that work for people, especially with our state facing a $400 million shortfall next session. I appreciate Speaker Charles McCall for allowing members to vote. Representatives, both Republicans and Democrats, who stood tall and voted for this measure should be commended.

“As a result, worst-case scenarios could become reality for several agencies that are being forced to cut crucial services if the pending revote fails. It will be devastating for many who depend on these services. This budget package would have helped set us on a path to long-term sustainability and stability by making more recurring revenue available, helped us to stop balancing our budget irresponsibly with one-time funds, and provided a teacher pay raise as well as a raise for state employees, and tax relief for low-income Oklahomans.

“The House leadership captured the bill, which with 71 votes was within a razor-thin margin of passing. The speaker should put it back up for a vote, and I call upon Oklahomans to continue to contact their representative.

“We can’t set Oklahoma up for failure by not facing our budget problems and kicking the can down the road. We must restore hope, and set future generations of Oklahomans up for success.”

Oklahoma's House Democrats released a statement Wednesday:

“Since the beginning of this extraordinary session, Republican House leadership has told Oklahomans that they have the 75 percent of their caucus needed to raise revenue, and it was the Democrats who needed to come on board with their support. Today, after more than 80 percent of our caucus held their nose and voted yes for this far from ideal revenue bill, we found out this simply isn’t true. The House Republican Caucus delivered 48 votes or less than 67 percent of their caucus. 

House Republicans have once again failed to deliver the leadership necessary to bring an end to this special session and give certainty to the most vulnerable of Oklahomans. Once again, Republicans have gone out of their way to provide false hope to teachers and state employees desperate for a raise, and continue to put the wants and desires of select oil and gas companies over the millions of Oklahomans affected by this body’s inability to fix the budget problem it created. 

Throughout this session, we have heard many promises from Republican leadership, and time and time again, those promises have been broken. We have seen a committee chairman refuse to vote his own bill out of committee, and we have seen the author of a teacher pay raise bill refuse to support the bill needed to fund those raises. 

This caucus stands ready to reverse irresponsible income tax cuts. We stand ready to make oil and gas pay their fair share. And we stand ready to bring an end to this special session."

 

Mike Neal from the Tulsa Regional Chamber released a statement:

“It is deeply disappointing that state legislators have yet to agree upon a compromise to fill the budget shortfall and fund core services. Not only is the competitiveness of Oklahoma’s economy at stake, but so are our citizens’ lives if drastic cuts are the ultimate outcome of this special session. This cannot be the political norm in our state.

“Continued cuts have gutted basic core services like public education, health care and infrastructure. Oklahoma’s economic success depends on finding new, recurring revenue in order to provide a quality of life that makes our state a desirable place to live and work.

“We implore Oklahoma’s elected officials to act boldly and work together to find long-term, sustainable solutions to the state’s budget. The people of Oklahoma deserve better. Period.”

The Oklahoma Public Employees Association released a statement:

“By not passing the revenue package today, the Oklahoma House of Representatives chose to neglect core state services provided by our state agencies and in our schools,” said Sterling Zearley, executive director of the Oklahoma Public Employees Association. “It is clear that the influence of tobacco and oil companies on many house members is stronger than their desire to fund services their constituents rely on.”

“Several lawmakers voiced support for core services during debate and we appreciate those who did then voted for the measure,” he said. “They understand how this bill, while not perfect, was a step in the right direction. Those who voted no seem to be okay with service cuts and starting next year with a larger deficit.”

“We will continue to advocate on behalf of state employees, retirees and the services they provide through state agencies, despite the inaction of the house to support core state services,” he said.

Oklahoma State School Boards Association Executive Director Shawn Hime issued the following statement on budget bill vote:

"Once again, political gamesmanship and partisan politics have won the day at the expense of Oklahoma children and families. Holding out for a perfect plan when a strong compromise is on the table is incredibly short-sighted.

I urge state leaders not to let today’s vote be the final word. Cutting core services, raiding agency revolving funds and relying on one-time money is irresponsible, immoral and unacceptable.

I appreciate the majority of representatives who courageously voted yes today. For the sake of our state and its people, our elected leaders must come together for a solution."

The Oklahoma Senate Democratic Leader, Sen. John Sparks issued a statement commenting on the failure to pass the bill:

“Today’s failure of the ‘A+’ revenue package is undoubtedly disappointing and frustrating. However, now is not the time for us to give up and settle on cash and cuts as a short-term fix for our long-term budget problem. Now is the time for us to redouble our efforts, push forward, and find a new path to a long-term budget solution which will protect the most basic, core government functions and services.

“Today, too many members of the House decided they did not support the ‘A+’ Plan.  I believe there are only three reasons for a no vote on this plan: a preference to use cash on hand to plug the current budget shortfall; a preference to further cuts to the budgets of Oklahoma’s agencies; or a preference to pass a different revenue package.

“Today, more than ever, I am certain that cash and cuts are not a viable option for our state and the future of the core government functions and services on which our most vulnerable constituents rely.

“I am convinced that we cannot just use cash on hand to continue the budgetary shell games which have flourished at the Capitol over the last decade.  Just this week, our intention to use the last of our limited cash to fill our long-term budget hole triggered Moody’s to downgrade Oklahoma’s fiscal status.  They noted that using the last of our cash might help for a few months, but Oklahoma’s ‘inability to pass a comprehensive and permanent solution is credit negative.’ In addition, it was reported last month that Oklahoma’s current financial situation is so bad that we are one of the three states least prepared to handle an economic recession. Using one-time cash resources to fill our budget hole may ease the pressure to truly fix our budget problem, but it does nothing but highlight our ongoing fiscal mismanagement and inability to pass a comprehensive, long-term budget solution for our state.

“I am also convinced that there is no more room for cuts to core government services. We have cut to the point where we have four-day school weeks, a reduction in the Eight-Year Transportation Plan and we are facing the elimination of the ADvantage Waiver Program, which will force thousands of senior citizens out of in-home care and into nursing homes.

“For those who do wish to implement more cuts, I am asking you to show us where you wish to do so in your own district.  Don't answer with the evasive and rhetorical 'fraud, waste and abuse.'  Do you want to consolidate your schools or to turn four-day school weeks into three-day school weeks? Do you want to take roads and bridges in your district off the repair list permanently? Do you want to permanently close state parks or OSU Extension Offices or CareerTech Centers? Are you willing to cut funding for Meals on Wheels or senior nutrition centers or veterans hospitals? If you aren’t willing to support new revenue, now is the time to itemize, in your district, where you are willing to implement permanent, recurring cuts — not one-time cost savings.

“Finally, I am convinced that since neither cash nor cuts are responsible options for Oklahoma, the final alternative is to come back with another revenue plan in the coming days. This option is the most responsible, but it is also the one that requires the most work from us. I know we are all tired. I know we all have jobs and families who we are neglecting while we are here. But if you are a legislator, or a constituent, or a stakeholder in business which opposed today’s option, then we need you to help us put together another plan which will receive the necessary level of support from the citizens of Oklahoma and their legislators.

“We all owe it to our constituents to reject cash and cuts as our only options and continue to work toward a long-term budget solution which protects the most basic, core government functions and services without balancing the budget on the backs of the poor and the vulnerable. This is what our constituents demand of us and what they deserve from each and every one of us, with no exceptions and no excuses.”

House Speaker Charles McCall released the following statement after the bill failed:

“As we have said throughout the session, the 75 percent super majority requirement of State Question 640 is a high hurdle. We heard from our constituents more on this bill than any other in a long time, and it was clear that the House listened and voted the way their constituents encouraged them to vote. The bill passed with a large majority, which makes it eligible to be voted on by the people of Oklahoma at the ballot. It is time to move on to what can pass and help this year’s budget. Last week, the House -- in four bipartisan votes that all received more than 90 percent support -- sent several appropriations measures to the Senate that would use existing cash to ensure vital health services and programs will continue without interruption into April 2018. We also approved a bill that would increase the gross production tax to 7 percent on more than 6,600 existing wells and generate $48 million for this year’s budget. I encourage the Senate to act quickly to pass those measures for the citizens of Oklahoma.”

Oklahoma Senate President Pro Tempore Mike Schulz commented on the failed revenue vote in the Oklahoma House:

“Because the Oklahoma House of Representatives did not advance the bipartisan revenue deal, teachers and state employees won’t get a much-needed pay raise and cuts to mental health and other services will be much more severe. The cuts will be deep and spread out across all government. This is not where any of us wanted to be, but we are here because the revenue bill failed in the House. The financial scandal at the Health Department is an unexpected and costly expense. If we spend everything we have now, there won’t be any money left for other emergencies that could arise. And spending even more one-time money now makes next year’s budget deficit - already forecast at $560 million - even larger. The Oklahoma Senate will work to minimize the impact of cuts on core services.”

Oklahoma Policy Institute Executive Director David Blatt released the following statement on the Oklahoma House's failure to pass HB 1054:

"Most Oklahomans want a comprehensive solution to our budget crisis. The solution preferred by the majority would prevent deeper budget cuts, provide desperately needed raises for teachers and state employees, and put the whole state budget on firmer footing next year. Instead, State Question 640 has allowed a small number of hold-outs to block the popular will. Continuing gridlock will endanger life-saving health care services, add to next year's budget hole, perpetuate the exodus of Oklahoma's best teachers out of the state, and risk costly state credit downgrades.

Lawmakers still have time to reconsider the vote today. Allowing this plan to fail after coming so close would be a tragedy. We urge the lawmakers standing in the way of this deal to hear the thousands of advocates for mental health, disability care, and other crucial services who are communicating the dangers of more budget cuts. We urge them to respect the wishes of the majority and pass the only bipartisan consensus plan that has emerged from weeks of special session."

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