Cigarette tax increase considered (Skiatook Journal)

By Senator J.J. Dossett

With three weeks left in the 2016 legislative session, we’re finally beginning to vote on bills that will shape the 2017 fiscal year budget. On Thursday the Joint Committee on Appropriations and Budget approved a slate of tax credit and incentive reform measures that will help reduce the state’s $1.3 billion budget gap by $190 million—and more such bills will be voted on in the coming days.

I’m disappointed that there wasn’t enough support to suspend the 2016 income tax cut this year. Only the wealthiest Oklahomans received any significant tax savings from this change, but it resulted in $147 million fewer dollars available to fund our schools, health and mental health.

I fully support capping and reforming tax credits for businesses that have not resulted in the job creation and economic benefit to the state that they were supposed to produce. With school districts across the state being forced to eliminate teaching positions, thousands of Oklahomans at risk of losing access to health and mental health services, we simply can’t afford to leave such credits and incentives in place.

I am pleased that we will soon be voting on legislation to place a $25 million cap on tax rebates for at-risk oil and gas wells, which are wells operated at financial risk. It’s estimated that cap will save $105 million a year. However I am opposed to eliminating credits that working families rely on during these tough economic times. These were highlighted recently by the Oklahoma Policy Institute and include the earned income tax credit, the sales tax relief credit and the child tax credit. According to OK Policy, more than 400,000 households depend on these credits. That’s more than 40 percent of all the families in our state.

The Oklahoma Health Care Authority has been among those supporting the idea of raising the tax on cigarettes by $1.50 a pack. Due to anticipated budget cuts, they’ve already announced plans to reduce healthcare provider payments by 25 percent, a move which many say will result in the closing of rural hospitals and most of the state’s nursing homes. That would be devastating for Oklahoma.

The question is whether there would be enough support to pass a cigarette tax hike in the Legislature. State Question 640, approved by Oklahoma voters in 1992 requires all tax increased to be approved by three-fourths of the Legislature and the governor, or by a vote of the people. Only two tax increases have been referred to the voters since SQ 640 was adopted; a tobacco tax increase in 2004, which passed, and a proposed fuel tax increase in 2005 which failed.

It will be interesting to see if this measure actually comes to the floor and if it does, what kind of support it will receive. I’ll keep you posted.

I welcome your comments on state government and the issues before us. Please feel free to contact me by writing to Senator J.J. Dossett at the State Capitol, Room 521-A, Oklahoma City, OK, 73105; call me at (405) 521-5566.

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