July marks the beginning of several Oklahoma tax hikes to raise more than $400 million for teacher salaries and other budget priorities.
Drivers have begun paying an extra 3 cents per gallon on gas and 6 cents on diesel fuel as of Sunday. The motor fuel taxes are expected to bring in $105 million during the budget year that began this month. The money will go into the state's general revenue fund, which allowed lawmakers to make appropriations based on collections expects over the next year.
The tax hikes are the result of months of negotiations that resulted in two special sessions. Lawmakers reached a deal on increasing tax rates to pay for a teacher pay raise as pressure mounted ahead of a teacher walkout in the spring. Democrats agreed to support legislation raising the cigarette tax rate when it was bundled with the gross production tax increase approved in March.
The oil and gas production tax increased from 2 percent to 5 percent for the first three years a well operates, and 7 percent after that time period. That increase is expected to raise about $100 million from oil production and about $71 million in natural gas collections.
Cigarettes are taxed an additional dollar per pack, which is expected to bring in $152 million over the next year.
The fuel increases are expected to affect travelers during the July 4 holiday. The cigarette tax will impact where the product is sold, but the fuel tax will impact every driver, said Mike Thornbrugh, spokesman for QuikTrip.
"It's just emotional. People need (fuel) all the time, 24 hours a day and they see these big signs with the prices fluctuating," he said. "Unfortunately they've been going up. People will get angry about that."
A group called Oklahoma Taxpayers Unite began a petition to have the tax raises placed on the November ballot in response to the increase. A court ruling set the petition back. The increase could still be repealed if the group makes up the required signatures, though they announced they were abandoning the repeal effort.