House Approves Plan for Investment Fund Using Off-The-Top Gross Production Tax Revenue
State lawmakers pass a bill to set up a long-term investment fund using 20 percent of Oklahoma’s annual gross production tax revenue.
House Bill 1401 calls for off-the-top money to start going into the Oklahoma Legacy Fund once the state sees at least flat general revenue fund collections. Rep. David Perryman said right now, that’s a bad idea.
"We still need that money for general government. We need that money for education. We need that money for public safety. We need that money for Department of Corrections. We need that money for state employees who haven't had a raise in nearly a decade," Perryman said.
Rep. John Montgomery says such a fund is common among oil producers like Middle Eastern nations, Norway and some U.S. states.
"Alaska did this decades ago. They now fork out about $1,000 to every single Alaskan that lives there," Montgomery said.
Perryman asked Montgomery whether introducing a new financial trigger was prudent during a protracted budget crisis.
"Wouldn't you agree that a trigger that automatically does this is kind of a dangerous thing with our economic instability at the current time?" Perryman said.
"No, because this is actually a trigger that helps fix some of the current economic instability that we do have," Montgomery said.
Most of the Oklahoma Legacy Fund's earnings would be reinvested into it for at least 10 years and likely longer. HB1401 says 90 percent of earnings will be reinvested, 2 percent used for administrative costs and 8 percent transferred to a new Common Schools Legacy Fund until the Oklahoma Legacy Fund's earnings and the state's gross production tax revenues hit the same 10 year moving average.
HB1401 does not say how the Oklahoma Legacy Fund's investment earnings will be spent after that happens. The bill passed 65–22 and heads to the Senate.