Dueling news conferences at the Oklahoma Capitol Wednesday revealed deep divisions between Democrats and Republicans over how to resolve a budget deficit of $900 million projected for next year.
The Legislature has only 12 more days to go before the deadline to pass a budget.
A House bill proposed by majority Republicans to whittle down $340 million of the projected $900 million budget deficit for next year was pulled after Democrats held their news conference in the morning.
Republicans want to maintain deep tax cuts for oil and gas companies while raising taxes on a broad spectrum of goods and services.
Democrats want to restore a part of the gross production tax on oil and gas produced and have taken a hard stand against an additional tax on gasoline.
Democrats are strongly united on this issue and refuse to allow a significant increase in gasoline taxes.
“We will not vote to raise taxes on the back of middle class families to balance this budget at the same time that the Republican majority lets the oil and gas companies off the hook,” Democratic Minority Leader Scott Inman said.
Surrounded by members of the House Democratic caucus, Inman announced that they would not support a Republican bill scheduled for a vote later in the day to raise $340 million of the $900 million needed to make up a budget deficit for next year.
He accused the Republicans in the House and Republican Governor Mary Fallin of “pulling the rug out from under us” in negotiations over the budget.
He said that their negotiations had been for Democrats to allow a cigarette tax as long as Republicans would allow a partial restoration of the gross production tax on oil and gas after having cut it by about 5 percent over the last several years.
“Then, they decided to come up with their own solution” which was to add a tax to gasoline in addition to the cigarette tax.
But, they would leave the gross production tax in place.
Inman said that Oklahoma has one of the lowest gross production taxes in the nation.
Asked if he thought the public would agree with their move, Inman was characteristically blunt.
“I think the people of Oklahoma get that the Republican majority that has cut taxes for wealthy folks and wealthy oil and gas companies are turning around and trying to make up for those cuts by raising gas taxes on middle class families.”
And he insisted that Democrats were willing to negotiate on the cigarette tax and a raise in gross production taxes to 5 percent even though they think it should be restored to its original 7 percent.
“Understand, our caucus is standing on principal,” said Inman. “We truly believe that the reason we are in this mess is because of wealthy tax giveaways to the most powerful folks in the state.”
He criticized the Republicans for telling the public that “everything is on the table” when they will not negotiate about the gross production tax.
“By god, put the gross production tax on the table,” said Inman in a direct challenge to House Republican leadership.
An anti-tax fervor in 1992 led voters to pass a state question to change the Oklahoma Constitution.
It requires the House and the Senate to pass a revenue/tax increase by 3/4 vote and for the governor to sign the bill before the tax can be imposed.
A direct vote of the people to raise revenue is also allowed by the amendment.
Because the 72 House Republicans are splintered on how to find a solution to the problem, House leadership had hoped to get enough votes from Democrats to send their bill on through.
But the Democrats won’t budge on more regressive taxes on the middle class and poor without restoring the gross production tax.
Republican Governor Mary Fallin then held a news conference at noon in response to the House bill being stalled.
“We know that we can’t have budget shortfalls every year because we don’t have the courage to put forward, to cast the votes, for the ideas and fix our budget and make it sound structurally, and develop a path forward for our state,” Fallin said.
She was vaguely critical of Democrats for being “locked in” to a position.
Fallin challenged those who were critical of the plan that had been pulled late in the morning.
“Give me some ideas. Where’s your plan? I had my plan out there as governor. Where’s your plan?”
In fact, Democrats presented their plan at a news conference March 23.
They estimated it would raise “nearly $1.4 billion” in new revenue if passed.
The Democrats’ plan would restore a large portion of gross production taxes cut in earlier years and restore tax rates on upper income Oklahomans that were also cut by the Republican-controlled legislature.
It also called for removing the many credits and exemptions given to specific industries.
Fallin’s plan was to raise $840 million by taxing 164 different services used by most people like oil changes and haircuts.
But it did not include any taxes that would significantly affect the wealthiest Oklahomans, especially in the oil and gas industry that heavily contributes to the Republican Party in Oklahoma and nationally.