Hamming up the budget
Chutzpah and spinelessness in Oklahoma
“To raise the gross production tax on the industry when prices are below $50 for oil and below $3 for natural gas, that’s unconscionable. That sends the wrong message. We can’t always go back to the trough of loading up on oil and gas every time the state needs revenue.”
That’s hyperbolic Harold Hamm, Chief Executive Officer of Continental Resources, a/k/a, one of the pigs guarding the trough, reminding us that he drills for our sins and doesn’t understand why legislative leaders won’t recognize how much he means to us all.
As a result of these tax breaks, the state is projected to bring in $460 million less this year (FY 2017) than if all production was taxed at 7 percent, based on estimates the Oklahoma Tax Commission provided as part of the December 2016 certification — $460 million here, $460 million there and pretty soon there’s enough money to send the kids to school five days a week.
This is very much an issue at the moment because, as of this writing, legislators just passed a $6.8-billion dollar budget, as Oklahoma Policy Executive Director David Blatt reminds us, that no legislator had time to read, the public hadn’t seen, and about which no summaries had been made, because, well, that’s the way we roll. We presently have an $878,000,000.00 budget hole, largely because of the cuts to the gross production tax (as well as some really stupid, ill-timed personal tax cuts) so, of course, legislators spent most of this session arguing about tacking on an extra buck and a half on a pack of cigarettes.
Now if we can just get smokers in Oklahoma to increase to, say, 4 packs a day and then not die long, painful, expensive deaths, we’ll be in great financial shape.
Hamm, who, instead of gracefully accepting an end to a largesse the state never should have given him and couldn’t afford — money which should have gone to prison guards and students, to environmental protection and the elderly — brought out the chair and whip and watched the GOP majority in the state legislature cower in a corner like a soon-to-be laid off Ringling Bros. and Barnum & Bailey Circus lion.
Oh, it’s not like the legislature did nothing about gross production taxes — it just did very close to nothing.
The bill, HB 2429, would change the incentive rate for wells that started producing between 7/1/2011–7/1/2015 from one percent to four percent, until the well’s incentive period expires after 48 months. After 48 months, the tax on the wells would increase to seven percent.
That’s about 11% of the wells in Oklahoma.
Legislators also passed a measure instituting a $100 per year tax on all electric vehicles. There are, according to the Oklahoma Tax Commission, about 800 such vehicles in the state, so that’ll raise $80 thousand dollars, bringing the deficit down to $877,920,ooo.00
P.S. As a Nissan Leaf owner, I just want to say, we can’t always go back to the trough of electric car owners every time the state needs revenue.