Fog has yet to clear on state budget (Capitol Updates)

“Foggy Forest” by DmitryGapeshin is licensed under CC BY-NC-ND 3.0

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

Nine weeks down and seven weeks to go in this session, and the fog has yet to begin clearing on the FY-18 budget outlook. House appropriations Chair Leslie Osborn sent a shot over the bow recently when she asked agencies to report what they would do with a 14.5 percent budget cut. The results reported by most agencies were unacceptable by most any measure. But there still exists no public proposal by legislative leadership for a package of revenue measures that would come close to closing the budget gap.

It seems clear that a deal has been made to end the 10-year, fifty one-hundredths of one cent ($0.0050) tax credit earned on every kilowatt of electricity produced by wind facilities going into production after July 1, 2017. The credit is a refundable tax credit, which means it’s money that is paid directly out of the state treasury, and it has cost more than was ever anticipated. This, however will have no impact on the FY-18 budget so it will be no help in solving the budget gap. The budgets it will affect will occur in FY-19 and beyond.

The House of Representatives is where revenue increases must start, so it’s the House’s move. Democratic leader Scott Inman threw out another proposal last week to bring most of his caucus, consisting of 26 votes, to support the $1.50 per pack cigarette tax if the Republicans will support expanding Medicaid under the Affordable Care Act. This is in addition to the variety of revenue increases he proposed recently as part of a revenue plan that would include the cigarette tax. The revenue the cigarette tax would produce would more than pay for the state match for the federal dollars. It would also save state health care dollars that are now paying 100 percent for services that would be 90 percent paid by federal dollars.

Rumors circulate around the Capitol that “everything is on the table” when it comes to revenue increases, but the current thinking among the Republican leadership is that they are primarily looking at what they can pass with a 51 percent vote. Under the Legislature’s current working definition of a revenue increase, which is only measures that raise tax “rates,” this leaves most substantial revenue raisers off the table. Apparently, the Republicans feel it is futile, or too distasteful, to deal with the Democrats, although they know they will need at least 10 to 15 Democratic votes to pass most any significant tax proposal. It might be helpful if the Democrats could ease back for a while from some of the blame rhetoric that has become the staple of House floor debate. Lawyers are good at calling each other everything in the book in the courtroom then having beers together later, but legislators — not so much.

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Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.

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