Cigarette tax increase introduced in special session

Posted on: 10/4/17

Of interest in the 2017 special session is HB 1099X, which raises the cigarette tax by $1.50 and allocates the revenue to the General Revenue Fund for the remainder FY 2018, the current fiscal year ending June 30, 2018. Tax revenues go to the General Revenue Fund until July 1, 2018 then go to the Health Care Enhancement Fund in years thereafter.  According to the Office of Management and Enterprise Services, the FY 2018 funds will be dedicated in HB 1099X to the General Revenue Fund to provide the state flexibility in the allocation process and flexibility for cash flow for the three impacted agencies. Estimated revenue from HB 1099X is $128 million due to a partial fiscal year from passage and collection. However, every month the cigarette tax is not passed, another $20 million is subtracted from the revenue estimate.

The revenue from HB 1099X will be appropriated to the same three agencies that were in the unconstitutional SB 845, the cigarette fee, and other bills heard last session. Those three agencies are: Oklahoma Health Care Authority, Oklahoma Department of Mental Health and Substance Abuse Services and the Oklahoma Department of Human Services.  HB 1099X passed House Joint Committee on Appropriations and Budget (JCAB) with 19 yes and nine no votes, and Senate JCAB on a vote of 11 yes and two no.  HB 1099X is ready for a vote on the House floor.