Oklahoma Budget Plan to increase Taxes on Gas and Cigarettes

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Lawmakers in Oklahoma seem to have arrived at a budget agreement a few days prior to an important deadline. Tough negotiations involved plugging an almost $900 million shortfall of the budget. Both Republicans and Democrats have debated over this budget deficit. This was not the first time a consensus hasn’t been reached. Senate leaders put a damper on an earlier budget deal conceived the second week of May.

Failed efforts

The earlier plan included increasing the cigarette tax, paring of incentives provided to the gas and oil industry, and restoration of tax credit on earned income. The plan would have widened tribal gambling. Dice games and roulette were to be included as well. The early days of May's third week saw resistance when it came to increasing the cigarette tax. It was shot down by the House of Representatives after a number of both Republican and Democrat representatives voiced opposition to this bill. However, a substantial agreement has been reached with GOP members. A budget agreement was announced on May 16 by Mary Fallin and Mike Schulz, the Governor and Senate President Pro Term respectively.

Charles MacCall, the House Speaker, announced the budget agreement through a news conference. According to Fallin, Republican lawmakers have made a plan where recurring revenue will be generated. This revenue plan includes a hike of the cigarette tax, as well as the gasoline tax. This will permit new gas and oil wells to keep their rate of gross production tax at about two percent for a period of 18 months instead of 36 months. Fallin urged her fellow Representatives by saying it was time to get the budget done. If not complete, a special session would need to be held. According to McCall, the House Speaker, the revenues generated by the plan would fund core services, including a possible pay raise of $1,000 to teachers. The latter plan will cost $52.5 million.

Democrat support

Republican leaders highlighted the need for Democratic support so the measure could be passed with a ¾th vote. Schultz admitted that the GOP did not want to increase taxes, but conceded so that that economy of state could be improved. Fallin said no person would receive 100 percent of what was originally desired.

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