OKLAHOMA CITY – Several House Democrats have responded to yesterday’s Oklahoma Supreme Court decision to allow an initiative petition to restore the gross production tax to pay for education costs to proceed.
State Question 795 would eliminate the tax rate that caps gross production at 2 percent and effectively restore the gross production tax back to 7 percent on all oil and gas wells. The restoration of the gross production tax will bring in an additional $340 million. A portion of this revenue would then be used to fund a $4,000 teacher pay raise and provide funding for other costs related to public education.
“This initiative represents the last stand for teachers,” said Minority Leader Steve Kouplen, D-Beggs. “In the absence of a substantial revenue package that restores funding to education, provides needed raises to teachers, support staff and state employees, this state question will give the people of Oklahoma an opportunity to increase funding for education by ensuring oil and gas companies pay their fair share.”
The Supreme Court’s decision doesn’t just signal a “plan b” for teacher pay raises. It also offers leverage to allow the Legislature to move on gross production and pass a more complete revenue package that addresses inadequate state agency funding and low teacher and state employee pay.
“The time is now,” said Rep. David Perryman, D-Chickasha. “The oil and gas industry has spent millions of dollars to keep the gross production rate at 2 percent. Now, they are staring down the barrel at 7 percent. Surely, with this added pressure on the industry, the Republicans inside the Capitol can come to the table and agree to a revenue package that includes a gross production tax of at least 5 percent.”
As the debate on gross production tax continues, oil and gas companies have threatened layoffs in response to the restoration of the tax rate, but many democrats have argued that the layoffs have already happened in education and other essential services despite the low GPT.
“Restoring the gross production tax isn’t about punishing oil and gas,” said Rep. Eric Proctor, D-Tulsa. “This is about restoring funding to rural health care so we can stop the closure of rural hospitals. This is about ensuring teachers in Oklahoma don’t have to take multiple jobs to provide for their family. This is about the Department of Corrections being able to hire more correctional officers so prisons are adequately staffed. This is about doing what is fair and what is right for the people of Oklahoma.”
Although restoring the gross production tax doesn’t bring in enough revenue by itself to shore up the state’s financial woes, it does provide a key element to a revenue package that could.
“Since early last year, our caucus has said we will not support a revenue package that continues to shift the tax burden in this state from the wealthy to working-class Oklahomans,” Kouplen said. “If Republicans are serious about wanting to fix this problem, now is their opportunity.Lawmakers will never have a better chance than this moment to negotiate a deal that fairly increases revenue to restore funding to state agencies and provide an opportunity to raise the pay of teachers, educational support staff and state employees.”