Oklahoma on verge of fuel tax increases?

By Keith Goble, Land Line state legislative editor | Friday, November 10, 2017

Oklahoma could soon raise fuel tax rates for the first time in at least a generation to help bail them out of a budget jam.

The Oklahoma Legislature has been in special session in recent weeks in hopes of resolving a $215 million budget shortfall in the current fiscal year. Officials also are concerned about a shortfall awaiting them in the upcoming fiscal year.

In an effort to aid essential state government functions, the state Senate voted 37-5 to advance an amended House bill to raise an estimated $184 million for the rest of the current fiscal year. The provisions included in the bipartisan measure would raise $442 million thereafter.

The bill would raise state taxes on cigarettes, low-percentage-alcohol beer, the gross production tax on new oil and gas wells, and legacy wells. The state’s tax rates on gas and diesel would also be raised by 6 cents.

Currently, the state’s diesel tax is 13 cents per gallon, and the gas tax is 16 cents. The tax rates have remained unchanged since 1987.

The bill, HB1035, awaits a final House floor vote. If approved there, it would advance to Gov. Mary Fallin’s desk. The governor endorses the budget bill.

“This bill addresses our $215 million budget hole; provides recurring revenue to help bring more stability to our budget going forward for next year when we know that we will still have a budget hole,” Fallin said in prepared remarks. “(HB1035) provides a path for success for our state so we don’t have these budgetary ups and downs we’ve experienced the past three years.”

House leaders, however, may not bring the amended bill up for a vote.

Critics say the state would be better served by enacting reforms to help make sure they do not find themselves with the same problem down the road. They add that legislators could instead tap emergency reserves to address the funding gap until the regular session begins in February.

If signed into law, fuel tax revenue would increase by $56.8 million in fiscal year 2018. The revenue raised would increase to $170 million in fiscal year 2019.

Revenue raised before July 1 would be earmarked for the state’s General Revenue Fund. As of July 1, all revenue would then be allotted to the Rebuilding Oklahoma Access and Driver Safety Fund.

All tax increases included in HB1035 would take effect on Feb. 1.

To view other legislative activities of interest for Oklahoma, click here.

 

 

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