The Legislature starts its Special Session today, and how long it lasts may be the most important aspect of it, owing to one seemingly odd statute: no bill to raise taxes can be introduced in the last five days of a session. So if they plan to be out of there in a week, there will be no tax increases considered. That said, the search for revenues that can be collected without seeming to raise taxes will be at the very top of the agenda, and one doesn’t just shake the sofa cushions to obtain $215 million.
Expect the Democratic minority to push for restoring the 7-percent gross production tax on oil and gas, and expect the Republican majority to blow them off. Some background:
When commodity prices started to tank — those “new” to the industry were unprepared while oil and gas veterans sighed and began to tighten their belts and update their resumes. Shellshocked non-profits and businesses, who relied on industry support and investment, began the grim task of layoffs, scaling back services or shutting their doors altogether as corporate giving was dramatically reduced or cut completely. The entire impact reverberated across the state, but oil and gas got a big win.
The veterans had been here before, some of them several times: it’s simply the way it is. And then:
Just prior to the commodity price tumble, the industry received a gift from Oklahoma legislators and Governor Mary Fallin — a reduction in the gross production tax from 7% to 2% (1% for horizontal wells). While I didn’t have a crystal ball, it wasn’t hard to ponder “what if” scenarios. I didn’t have to live through history to learn from it — I asked peers, colleagues and friends, “If the industry experiences a downturn, won’t this impact the state budget and funding?” The general sentiment in response was, “Not our problem.”
Sentiments remain generally unchanged for now.