After several canceled meetings last week, the Oklahoma legislature's joint appropriations and budget committees approved several new revenue bills late Monday afternoon.
A cigarette tax hike returned as a standalone measure, House Bill 2372. Rep. Leslie Osborn said the$1.50 per pack increase will mean $215 million for the state, up from roughly $150 million the tax commission estimated last year for a similar measure.
"They've looked at the very latest trends on sales in all of our 77 counties. We feel that we're very secure with the [$215 million]," Osborn said.
The first $185 million each year will go toward health care, though there’s concern revenue will dwindle if smokers quit because of the tax. Sen. Roger Thompson said Oklahoma is spending $1 billion in tax dollars a year on health care.
"$250 million of that are smoke-related, and so if it does help to curb smoking, maybe we can save money on the other end of our expenditures," Thompson said.
Revenue in excess of $185 million will go to the general revenue fund.
Another measure, House Bill 2347, caps itemized state income tax deductions at $17,000 for the next three years. Asked whether that might drive dollars away from Oklahoma charities, Rep. Kyle Hilbert said the change would affect only 11 percent of taxpayers.
"They would still have itemized deductions on their federal return, which, I would argue has even greater value than the state side. So, it would have an effect, but it'd be hard to know."
The measure is estimated to bring in nearly $166 million. It does not go as far as a measure that decouples standard state income tax deduction amounts from their federal counterparts.
House Bill 2377 moves up the sunset date for several oil production incentives to July 1. It affects gross production tax incentives for certain lower-producing and risky wells and defers payment of those incentives for one year. Sen.r Mark Allen asked Thompson to compare the fiscal impact to another oil tax policy’s.
"If we were to raise the gross production tax to 7 percent on new wells, what would that amount be compared to the $46 million in this bill?" Allen said.
"If we raise gross production tax from 2 percent to 7 percent, it would have an impact of $17,699,063," Thompson said.
"So, we're actually — this is about a $29 million increase?" Allen said.
"Yes," Thompson said.
House Democrats say raising oil and gas gross production taxes to 5 percent would generate $312 million.
