2018 Session: Week 2 Recap

Hey guys! Welcome back to blog...this week we’ve got some great articles you can check out, a recap of the major legislative activity this week and some more details about what happened with HB1033XX. We’ll also preview the upcoming week in the legislature and look ahead to our first Capitol Day of 2018 on February 22nd.

Don’t Miss This

Here is a list of the the articles, podcasts, blog posts and more from this week that you don’t want to miss:

  1. Oklahoma Watch has a great article this week recapping the Q&A, floor debate and vote on the Step Up Plan. This is an in-depth, play-by-play of Monday afternoon and really is a good read.

  2. Lots of Oklahomans are ticked off that the Step Up Plan failed, but I think teachers probably are probably the most upset and with good reason. NonDoc has a great piece focused on the response from teachers to the legislature.

  3. If you needed any further evidence that our state is in dire straights, look no further than this story from the Enid News and Eagle.  The focus here is on bridges rather than infrastructure generally (hint: it’s not good).  Definitely worth a few minutes.

  4. Here on the blog and definitely on the pod, we try to focus on things we find interesting, surprising or hopeful.  Lately, it feels like there has been a lot of doom and gloom. We’re not excited about this report from The Frontier that broke on Monday afternoon and led to the resignation of Preston Doerflinger from all his government positions shortly thereafter. Despite the depressing nature of the content, it does represent some fantastic investigative reporting by the folks at The Frontier.

  5. We’ll try to end on positive note this week with this inspirational piece from The Washington Post focused on a group of high-school students from Lawton traveling to Washington, DC to meet the legislators and learn about government. No matter how bad things seem right now, if all our high school students are like these kids, I think the future for Oklahoma is bright.

  6. And we'd be remiss if we didn't mention the hilarity that ensued on Valentine's Day when folks on Twitter created Oklahoma legislature-themed Valentine's puns and tagged them with #oklegvalentines. Check it out for some good laughs (and a bunch of groans).

Legislative Watch

There was a lot going on at the Capitol this week. The main event of course was the failure of HB1033XX to meet the 75% supermajority threshold required of all revenue raising bills.  Technically, the bill did pass the House; however, since it did not get a 75% supermajority, it now goes to a vote of the people.  So, it passed - just not by enough?

So, what happened? Many people have expressed surprise that this package was unable to get through, given its similarity to HB1054 which came within 5 votes of passage in November.  Honestly though, we’ve heard from many folks inside the Capitol that prospects for the bill never looked good for several reasons:

  1. While an increase in gross production tax on oil and gas from 2-4% on all wells is a concession from Republicans (and industry), many Democrats feel very strongly that the tax needs to be at least 5%.

  2. Taxes on tobacco are regressive by their nature. Most habitual tobacco users and cigarette smokers in particular are lower income individuals without a college degree. Philosophically, Democrats tend to be opposed to regressive taxes and while many Dems acknowledge the public health and policy benefits of using a tobacco tax to encourage smoking cessation, but they feel strongly that the state budget should not be balance on the backs of lower income individuals with an addiction, particularly without asking industry to bear a higher percentage of the load (see number 1).

  3. I think the wind levy proved a poison pill for many Democrats.  Generally, the caucus is very supportive of renewable energy and felt very strongly that this new tax would serve to discourage investment in an industry that is (comparably) younger and still developing. There was intense opposition to this component of the bill by Democrats and may have been a deciding factor, at least for some of them.

  4. I think that many Democrats had concerns about other portions of the Step Up Plan. In particular, several of them expressed frustration over 2 other revenue bills that were scheduled to be heard if HB1033XX achieved the 75% supermajority. In particular, HB1035XX (capping the deduction taken by zero-emission facilities) and HB1037XX (lowering the standard deduction for state income taxes) were opposed by many Democrats.

Essentially, even though Republicans have a supermajority in the House, enough members of their caucus are opposed to tax increases under ANY circumstances that Democratic votes have to be brought on board to pass a revenue package. This package was able to attract 10 Democrats; that wasn’t enough.

A couple other things of note happened in the Legislature this week. HB2632, which would expand the “Stand Your Ground” statute to include “places of worship”.  Some members of the Judiciary Committee who are themselves lawyers had some strong feelings about 1) whether this is a good idea and 2) how the bills is written. 

Lastly, House Democrats held a press conference with State Auditor and Inspector Gary Jones endorsing his budget plan.  The plan includes an increase in gross production tax to 5%; a $0.75 tax on cigarettes and little cigars; and a $0.03/gallon tax on gasoline and $0.06/gallon tax on diesel.  The Democrats would like to add a cap on itemized deductions, allow casinos to use ball and dice games (which would create more taxable revenue for the gaming industry) and change hotel tax rates. The estimated total revenue for all of these measures is $622 million.  House leadership has signaled they may be open to at least some of these ideas but only for FY18-19.  Stay tuned.

Next Week

On Monday, the house will take up budget bills enacting cuts of 0.66% across all state agencies.  0.66% may not sound like a lot but it’s an effective cut of 2% as agencies have to implement these cuts in their entirety in the last quarter of the fiscal year.  No agencies are being held harmless and the cuts equal about $40 million.  The bills are expected to pass.  

As I mentioned earlier, our first Capitol Day is Thursday, February 22nd and we hope to see you there!  Be sure to look for next week’s episode of the podcast and accompanying blog post to make sure you’re up to date on everything that has gone down. Have a great week everyone and remember: Decisions are made by those who show up!