The Oklahoma House of Representatives defeated a $581 million package of proposed tax hikes late Monday night — creating more uncertainty about how the Legislature will balance the budget and fund a teacher pay raise.
Although a majority of House members voted in favor of the bill, the tally fell well short of the three-fourths majority needed to pass tax hikes in Oklahoma. The vote was 63 to 35. The bill needed 76 votes to pass. Fifty-three of the 72 Republicans in the House voted for the package, as did 10 of the 28 Democrats. One seat is vacant.
The bill was backed by Step Up Oklahoma, a statewide coalition of Oklahoma business and civic leaders.
House Speaker Charles McCall called a news conference at 9:30 p.m. to plead with House Democrats to come back to the Capitol with enough votes to pass the bill by midnight.
"I want to be clear," McCall said. "This is our best shot at a revenue package. There is not going to be another package considered. This was it."
House Democrats responded with a news release in which they contended the bill voted on Monday was “far from equitable and left unaddressed many of our state's needs.”
“This bill sought to mend some of our state's problems with taxes that asked working families to pay more while asking very little of those at the top and the oil and gas industry,” the Democrats said.
The Democrats said they were prepared to deliver the votes of all 28 of their members if Republicans would meet an itemized list of requirements that included such things as a 5 percent gross production tax, an increase in the top income tax rate to 5.25 percent, reinstatement of the earned income tax credit , an increase in the standard deduction for middle class Oklahoman, a pay raise for teachers and state employees and an end to attempts to “double tax renewable energy.”
Budget cuts are the remaining option, House Floor Leader Jon Echols said.
During the news conference, it was revealed that Republicans attempted to sweeten the deal for Democrats — even while the vote was in progress — by offering to make $67 million available for state employee pay raises, with the highest pay raises going to the lowest paid employees. The plan already called for funding a $5,000 teacher pay raise.
BancFirst Executive Chairman David Rainbolt, spokesman for the Step Up Oklahoma coalition, called Monday's vote a "dark day for education" and a "dark day for our children and our teachers."
"We lost the teacher pay raise, we lost the public employee pay raise. We lost our ability to balance the budget with new revenues," Rainbolt said.
"It is not time to be silent," McCall said earlier on the House floor. "This is a time for action. This is a time to finally give our hardworking teachers a pay raise."
House Appropriations and Budget Committee Chairman Kevin Wallace, R-Wellston, also told House members he believed this was the best opportunity they would have to pass a bill that would generate recurring revenue for the state.
"I actually believe this is our only shot," Wallace said. "We're out of options."
Most of the debate in opposition came from Democrats. State Rep. Emily Virgin, D-Norman, argued the bill would put too much of a tax burden on poor and middle-income people while letting oil companies and wealthy Oklahomans off easy.
"I will not be a part of letting those at the top and the wealthiest industry in this state off the hook," Virgin said. "They have to pay their fair share."
Virgin disputed Republican arguments that this might be the last chance they would have to vote on a revenue bill this session.
"Just as of a few minutes ago, we were being offered changes in this plan," Virgin said. "We were being offered further negotiations."
Teachers rallied Monday morning at the Capitol for the measure and a proposed $5,000 teacher pay raise. Many jammed the House gallery afterward, peering down on House members as they cast their election-year votes.
Republican leaders held the vote open long after it appeared headed for defeat. Gov. Mary Fallin tweeted a warning that House members shouldn't wait for a better deal.
"Let me be clear," the governor tweeted. "After listening to the debate on the Step Up plan, there is no bigger, better plan. This is the only plan. A no vote is a vote against funding a teacher pay raise, a vote against funding our health and human services and protecting our most vulnerable citizens, a vote against putting our state on a stable path forward. A vote against a better Oklahoma."
House leaders said before the vote that defeat of the revenue bill would force them to abandon a planned vote on a $5,000 teacher pay raise bill, because money wouldn't be available to fund it.
If the revenue bill is rejected, it could be resurrected if supporters can persuade enough members who voted “no” to switch their votes.
Otherwise, House members must quickly come up with another source of new revenue or begin planning for budget cuts.
The state was left with a $215 million hole in the current fiscal year's budget when the Oklahoma Supreme Court ruled a $1.50 per pack cigarette fee approved by the Legislature last year was unconstitutional. The Court ruled the cigarette was really a tax hike and needed a three-fourths majority vote to become law.
The ruling left three state agencies — the Department of Mental Health and Substance Abuse Services, the Oklahoma Health Care Authority and the Oklahoma Department of Human Services — without enough money in their budgets to make it to the end of the fiscal year.
Oklahoma's improving economy has resulted in tax revenue coming in better than expected, which should provide some relief in future years, but some cuts likely would still be needed across a number of state agencies to adequately fund those three agencies through the end of the current fiscal year.
The bill House members were voting on Monday would have:
• Raised the tax on cigarettes by $1.50 a pack.
• Increased the tax on gasoline and diesel fuel by 6 cents a gallon.
• Raised the initial gross production tax on oil and natural gas from 2 percent to 4 percent.
• Placed a $1 per megawatt hour tax on wind energy production.
• Taxed little cigars the same as cigarettes.
• Placed an additional 10 percent tax on chewing tobacco.
Related to this story
> Educators rally at Oklahoma Capitol to support teacher pay raises > House leaders will present budget cuts this week > How members voted on Step Up Oklahoma proposal > Pay raise fight worth the effort, teachers say > Oklahoma House Democrats discuss budget negotiations > Step Up plan defeated in House despite majority vote > Capitol Bureau: McCall on Step Up OK vote > Step Up Oklahoma RallyShow more >5
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Source : http://newsok.com/step-up-plan-struggles-in-house-despite-majority-vote/article/55832301253