Prospects brighten for cigarette tax increase in Oklahoma (The Oklahoman)

By Rick Green

In the 24 years since Oklahoma voters restricted lawmakers’ ability to raise taxes, the state Legislature has not been able to muster the three-fourths majority needed to pass a tax increase.

That’s why there were major doubts in February when Gov. Mary Fallin first proposed a $1.50-per-pack cigarette tax hike. 

Since then, the state’s budget hole has grown to a record $1.3 billion, there have been two revenue failures requiring across-the-board spending cuts and health leaders say the state’s Medicaid system is in danger of collapse.

Rep. Doug Cox, R-Grove, a medical doctor, is carrying legislation for the cigarette tax, which would be used to help shore up provider rates for Medicaid and stabilize the system.

He said interest in the bill picked up after news broke that the Oklahoma Health Care Authority would have to cut provider rates by as much as 25 percent if it didn’t receive sufficient state funding. 

Cox said such a cut would cause many nursing homes and rural hospitals to go out of business and could lead many doctors to decline to serve Medicaid patients.

He needs 76 votes in the 101-member House for the bill to clear that chamber.

There are 71 Republicans and 30

On Thursday, House Minority Leader Scott Inman said he was in discussions with Fallin and House and Senate Republicans to support the cigarette tax if it was tied to an expansion of Insure Oklahoma as envisioned under a plan drawn up by the Oklahoma Health Care Authority.

“We are encouraged by the discussion and hope next week to find a bipartisan solution to the health care crisis in Oklahoma,” Inman said.

“Right now I’m optimistic.”

However, Cox said that even if House Democrats support it, he still doesn’t
have enough support among House Republicans.

Cox urged the governor to push the issue. 

“If it’s one of her priorities, she needs to follow through and meet one-on-one with caucus members,” he said.

Senate President Pro Tem Brian Bingman said the cigarette tax hike still is under active consideration in his chamber and may even be gaining some momentum.

“Folks that are pushing the legislation from the outside are talking to members, and they seem encouraged that they are getting close to the support they need,” he said.

If the Legislature fails to pass the tax hike, it could be referred to the ballot by a simple majority vote of senators and representatives. However, that would mean a delay in receiving the funding, and it would be uncertain if it would pass at the polls.  

David Blatt, executive director of the Oklahoma Policy Institute, said lawmakers are “between a rock and a hard place.”

“Tax increases are unpopular for some, but the proposed cuts would be so devastating, lawmakers don’t want to be responsible for that outcome either,” he said.

“Either support a cigarette tax increase or see nursing homes close and hospital units close and home and community based providers go out of business. We may be in a situation where the crisis is severe enough where legislators will overcome their resistance to taxes and vote for it.”

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