Oklahoma gas tax may be raised (The Oklahoman)

By Rick Green

An increase in Oklahoma’s gasoline tax will likely be on the table next legislative session as it’s one of the smallest in the nation, it hasn’t been adjusted in nearly three decades, fuel prices are comparatively low and state leaders are seeking new revenue.

While Oklahoma’s gas tax has remained constant at 17 cents since 1987, No. 47 in the nation, other states have been increasing theirs, including seven that have approved hikes that will go into effect on Sunday.

An effort to boost the tax by 3 cents per gallon failed to get out of a legislative committee earlier this year, but Rep. Earl Sears, who presented the bill, said the proposal is likely to come up again as lawmakers look for a way to close a budget hole approaching $900 million.

“I am confident it will be discussed,” said Sears, R-Bartlesville.

House Bill 3212 called for a 3-cents-per-gallon increase that would be imposed as long as gas stayed under $3 a gallon. The extra tax would be removed if the wholesale price of fuel reached $3 a gallon. It would have generated $42.6 million.

Those who favored the proposal noted that when gas prices are down, the hike would be more palatable to motorists. Also, low prices for this commodity tend to disproportionately harm the state’s revenue picture as Oklahoma’s economy relies heavily on the oil industry.

David Blatt, executive director of the Oklahoma Policy Institute, said inflation has heavily eroded in real dollar terms what the state collects in gas tax revenue.

“Raising the motor fuels tax should definitely be considered as legislators look at another huge budget shortfall and as they try to avoid even deeper cuts,” he said.

Tax increases require a three-fourths majority vote.

“It’s always going to be a heavy lift to meet the super majority requirement,” Blatt said. “At the same time, there does seem to be an increased awareness of just how severe the cuts have been and just how desperate our situation is.”

Jonathan Small, president of the conservative Oklahoma Council of Public Affairs, said the Legislature’s first goal should be properly prioritizing its current revenue stream. He said the state could reduce tax incentives given to the wind industry and find a way to tap money from the Tobacco Settlement Endowment Trust.

However, he also said that ultimately the gas tax should be looked at as well, given that inflation has reduced what the state realizes from this source.

“The gas tax is one area where there needs to be a reasoned discussion about our current tax rate, not so much on how we compare to other states, but it’s that ours hasn’t been adjusted in some time,” he said.

Pennsylvania, Michigan, Nebraska, Georgia, North Carolina, Indiana and Florida will all see gas tax increases on New Year’s Day.

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