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Capitol Insider: Deal Or No Deal? Special Legislative Session Edition

Sep 29, 2017

Although the special legislative session has been suspended, the deal-making continues. eCapitol News director Shawn Ashley says a revenue-raising package may be in the works.

 

Gov. Mary Fallin met with the House Republican Caucus on Wednesday for more than two hours. After the meeting, Fallin told eCapitol she was optimistic.

"It's been a long, ongoing process," she said. "I'm actually hopeful that we'll be able to find a compromise agreement to move the state forward."

The Math

Revenue-raising measures like a cigarette tax or an adjustment to the gross production tax on oil and gas require three-quarters approval from the Oklahoma House of Representatives, or 74 votes.

During the last regular legislative session, 24 Republicans vowed to vote against all tax increases. Ashley says that same number of legislators will likely not support an increase during the special session either. That leaves 48 Republicans who could potentially vote in favor of a revenue-raising measure.

Ashley says all 28 House Democrats would be needed in addition to the 48 potential Republican votes to reach the 76-vote threshold.  

Ashley says while the terms of a possible deal remain unclear, the stage is set for a deal to be struck.

The Calendar

Any revenue-raising measures passed by the legislature can't take effect for 90 days after the governor signs the bill into law. That would mean collections wouldn’t begin until early January. Agencies would see the money distributed to their accounts in February.

The Health Care Authority, Department of Mental Health and Substance Abuse Services and the State Department of Health received budget cuts after the state Supreme Court found a cigarette fee unconstitutional that was expected to raise $215 million.

While legislators convened looking for revenue to fill the budget hole, the State Department of Health announced a series of actions Wednesday, including furloughs.

eCapitol reports the department will implement one-day furloughs without pay every two weeks.  The furloughs will take effect Oct. 30 for personnel making over $35,000. It’s not clear how other agencies will offset the cuts over the next few months.

“We're getting into a very dangerous situation financially here,” Ashley says.

Fallin has said she would veto any measures to further cut agency budgets.

 

Full Transcript

 

Dick Pryor: This is Capitol Insider, an insider's guide to Oklahoma politics and policy. I'm Dick Pryor, with eCapitol news director Shawn Ashley. Shawn, just three days into the legislative special session to address the $250 million budget hole. The House and Senate suspended the session subject to the call of the chair. Now, in the context of a special session, what does that mean?

 

Shawn Ashley: Well, it means we're waiting for them to come back. At this point nothing has been accomplished. No bills have been passed and nothing has been sent to the governor. So we are in a holding pattern until they decide to come back and consider some legislation and debate it.

 

Pryor: The cigarette tax increase is the big-ticket item with Democrats also pushing for raising the gross production tax on oil and gas drilling. Are legislators and the governor closing in on a deal?

 

Ashley: It sounds as if they may be working toward a deal. Whether they're closing in or not is yet to be seen. Gov. Mary Fallin met with the House Republican Caucus on Wednesday for more than two hours. We heard from some that she was indeed pitching some sort of proposal to them. But it seems no agreement has been reached there. She also met with Senate Republicans, probably to update them on the status of those talks and to see what other ideas they may be interested in pursuing as well. They need to come together on a deal soon, or time for state agencies is going to become very very precious.

 

Pryor: It takes 76 votes in the House to pass a tax increase. Are the votes there? Where will they come from?

 

Ashley: That is one of the big questions hovering over this special session. House Speaker Charles McCall said the other day that three quarters of his caucus was prepared to vote for the cigarette tax. But in talking to House Republicans, that doesn't seem to be the case. We've talked in the past about those Republicans who were “no new taxes”--hey wouldn't vote for any tax increases. And in fact, if you look back during the regular session, they didn't vote for any tax increases. Those number about 24, I'm told. So with a total of 72 Republicans in the House right now that leaves 48 who would vote for a tax increase, if you then had all 28 Democrats join with them. You would have 76, the minimum number necessary to approve any tax increase. That means you can't afford to lose another Republican and you can't lose any Democrats, if you're going to pass tax increases in this special legislative session.

 

Pryor: The margin is just that narrow.

 

Ashley: It's non-existent.

 

Pryor: Gov. Fallin says she will veto any budget plan that further cuts government services. Is that pledge pushing the sides toward a resolution that will generate more dollars that are needed to just fill the current budget hole?

 

Ashley: I think it very well may. We sold during the regular session that she made a pledge that she needed to see additional revenue generated and cuts kept to a minimum. And lawmakers were able to reduce cuts to about 5 percent for those agencies that received them. And they did provide some additional revenue-raising measures even though the tobacco cessation fee was eventually thrown out by the Oklahoma Supreme Court, which led us to where we are today. She seems to be holding to that pledge and has emphasized that, even on social media, pointing out as she did during her State of the State address, that a number of agencies have received large cuts over the last several years, some accounting for 66 percent of their original appropriation levels, and that further cuts would endanger state services.

 

Pryor: Is a teacher pay raise in play?

 

Ashley: I think it very well may be. If additional revenue can be generated and enough to fund that pay raise would be available, I think they would move for it.

 

Pryor: The health department has announced employee furloughs. That illustrates the dire situation the affected agencies find themselves in while waiting for any more money from the state. They may still have to cut.

 

Ashley: We're getting into a very dangerous situation financially here. Any revenue-raising measures passed by the legislature in the next few days and signed by the governor can't take effect for 90 days and that would be early January when you would begin collecting the tax. That means state agencies would not see it in their pocketbooks until sometime in February. So those agencies--the Health Care Authority, the Department of Mental Health and Substance Abuse Services and the Health Department, which are losing the tobacco cessation money, run the risk of seeing their monthly budgets greatly diminished. And how they're going to handle that in these coming months is something they have yet to tell us.

 

Pryor: That's Capitol Insider. Catch us on KGOU.org and get the Capitol Insider podcast on iTunes. Until next time, with Shawn Ashley, I'm Dick Pryor.

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