Legislature searches for revenue as teacher walkout goes into third day

Posted on: 4/4/18

Teachers continue the walkout after the Legislature has failed to pass additional revenue. For those wondering why teachers walked out of classrooms after the Legislature passed (and Gov. Mary Fallin signed) a teacher pay raise, Oklahoma Education Association president Alicia Priest began the teacher’s rally this week by making it clear that a pay raise would not appease Oklahoma teachers demanding more general education funding.

Additionally, funding needs in health care and other core services have yet to be addressed by the Legislature. While passage of the $1 per pack cigarette tax increase is a victory for health advocates by preventing 17,300 Oklahoma kids from becoming smokers and saving $767 million in future health care costs, the revenue generated from the measure will not be dedicated to health care until FY2020.

Last week, after passage of HB1010XX, the historic revenue package, the Legislature revisited the measure to repeal one of the bill’s provisions. HB1010XX included the Oklahoma Occupancy Tax Act, which imposes a $5 per room per night tax on hotel rooms. HB 1010XX was projected to raise $475 million in FY 2019.  

On Thursday, March 29, the House of Representatives session was dedicated entirely to passing an amended version of HB 1012XX, which repeals the Oklahoma Occupancy Tax Act. This provision was repealed over the strenuous objection of House Democrats. The hotel/motel tax was opposed by the Oklahoma Municipal League, representing cities and towns and chambers of commerce. The repeal shorts the $474 million package by $50 million.  Following is a review of enacted measures and those under consideration:

• HB 1010XX increases the cigarette tax by $1 per pack and changes how other tobacco products are taxed; raises the motor fuel tax by $0.03 per gallon for gasoline and $0.06 per gallon for diesel fuel; raises the initial gross production tax rate from 2 percent to 5 percent for the first 36 months of production and assesses a new $5 per night hotel occupancy tax (hotel/motel tax repealed). Signed by governor.
• HB 1011XX caps itemized deductions at $17,000 per year but excludes charitable contributions and medical expenses that are deductible for federal income tax purposes. HB 1011 is expected to generate $94 million, of which $84 million may be appropriated for FY 2019. Signed by governor.
• HB1013XX modifies state-tribal gaming compacts to allow for non-house banked table games, familiarly known as ball and dice games. HB 1013 is expected to generate $24 million in FY 2019 and $49 million in FY 2020. Passed House – pending action in the Senate.
• Teacher pay – HB 1023XX – raises range from $5,000 for a first-year teacher with a bachelor’s degree to $8,395 for a 25-year teacher with a doctorate. The bill is projected to cost $353.5 million in FY 2019. Signed by governor.
• HB 1024XX provides raises to state employees ranging from $2,000 per year for employees currently earning under $40,000 per year to $750 per year for workers earning more than $60,000 a year. The measure is expected to cost $63.8 million. Signed by governor.
• HB 1026XX provides a raise of $1,250 to all school support employees, at a cost of $52 million. Signed by governor.

(Lynne White)