The oil and gas industry is playing an early major role financially in trying to influence the outcome of the Oklahoma governor’s race.
As the debate persists over how much the state should tax oil and gas production, an Oklahoma Watch review of campaign finance reports found oil and gas interest groups and executives have spent heavily in the early months of this year’s gubernatorial campaign. Fifteen candidates are running for the office.
Campaign reports through March – the latest available – show candidates took in more than a half-million dollars from donors with oil and gas ties this election cycle. Republicans claimed 97 percent of the money.
The total amount has likely increased since and will balloon further in the final weeks leading up to the June 26 primary. Donors who have reached the maximum spending limit – $2,700 per individual or $5,000 per political action committee – will get additional chances to give during the weeks before an expected Republican run-off on Aug. 28 and the subsequent 10 weeks before the Nov. 6 general election. The limits apply for each election.
The $516,725 in oil and gas-linked donations reported so far, which represents about 7 percent of all donations in the race, shows the influential industry is taking a strong interest in the primary. It also indicates many donors are not waiting until the general election to try to sway the outcome.
The industry is one of the largest contributors to political campaigns in the state. Other industries, such as the legal and medical fields, also contribute significantly to campaigns. But data from the organization FollowtheMoney.org shows oil and gas is the leader in all Oklahoma campaigns this cycle.
While the 7 percent may appear small, its profile stands out amid the numerous special interests and individuals who give to campaigns. The total also doesn’t include amounts given to so-called “dark money” groups that advocate on issues, sometimes with indirect benefit to a candidate.
This year’s primary comes three months after the Legislature and Gov. Mary Fallin defied calls from some of the top drillers in the state by increasing the gross production tax on oil and gas wells from 2 percent to 5 percent for their first 36 months of production. After that period, the rate rises to 7 percent.
The increase was part of a $425 million tax package that also included raising taxes on cigarettes and motor fuel. The gross production tax hike is expected to raise at least $170 million next year.
The future of those tax increases is in jeopardy, however.
A group of anti-tax activists led by former U.S. Sen. Tom Coburn is seeking to have voters decide in November whether to repeal the $425 million tax hike, which helped pay for a teacher pay raise.
Regardless, Oklahoma’s next governor could take a leading role in any efforts to lower or raise the gross production tax. A budget surplus caused by a surging economy, for instance, could increase pressure to reduce the tax.
“I think (oil and gas interests) are seeing what is at stake,” said Mickey O. Thompson, an oilman who formerly ran the Oklahoma Independent Petroleum Association. “Who knows if the governor can increase or decrease the taxes alone, but he will have a big bully pulpit and who knows what can happen.”
“Oklahoma Watch is a nonprofit, nonpartisan media organization that produces in-depth and investigative journalism on a range of public-policy issues facing the state. For more Oklahoma Watch content, go to www.oklahomawatch.org.
