OKLAHOMA CITY (AP) — Oklahoma's tax on gasoline and diesel, untouched since 1987 and among the lowest in the nation, is becoming a tempting target for state lawmakers desperate for revenue amid a third straight year of budget declines.
Several Republican legislators said last week they expect proposals will be unveiled once the session begins in February to increase the state's gasoline and diesel taxes of 17 cents and 14 cents, respectively.
"I would not be surprised to see a fuel tax, tobacco tax or a tax on services being filed just so there is a vehicle out there, a placeholder for that discussion," said new House Speaker Charles McCall, R-Atoka. "But actually getting that accomplished is a totally separate issue."
Oklahoma ranks 49th among the 50 states for its tax on diesel and 48th for its tax on gasoline, according to a November report from the American Petroleum Institute.
During last year's session, as lawmakers looked to close a $1.3 billion hole in the budget, Rep. Earl Sears introduced a bill to increase the tax by 3 cents per gallon. The measure would have generated about $41 million annually, according to a fiscal analysis of the bill by House researchers, but it failed on a 14-9 vote against it.
"It was an election year," said Sears, R-Bartlesville. "We had members who were very reluctant to raise taxes."
This year, lawmakers are again facing another massive budget hole of about $870 million, or 12 percent of state spending, and many of the one-time sources of revenue that the Legislature tapped last year to balance the budget are no longer available.
While there is a lot of chatter this year among Republican leaders about the prospect of raising revenue through increased taxes, it's unclear how much political will there is to do so. The approval of any tax increase requires a three-fourths vote in the House and Senate, and nearly a third of the members in each chamber are brand-new, and many of them campaigned on a platform of lower taxes.
"That's a very high threshold," McCall said, noting a 76-vote requirement in the House. "The size of our caucus (75 members) ... we don't even have 76 members if you could get them all together. And there's going to be a division in the caucus on that issue.
While McCall said he expects to have a good working relationship with House Democratic Leader Rep. Scott Inman, the minority party likely won't be too eager to vote for tax increases that disproportionately affect the middle-class and working poor. Democrats in both chambers have been particularly vocal about Republicans' recently enacted tax cuts on both income and oil and gas production, both of which favor high-income earners.
Jason Dunnington, D-Oklahoma City, said that while he's open to looking at a fuel tax increase, it likely will generate a diminishing amount of revenue because of greater fuel efficiency and an increase in electric vehicles. Dunnington said it makes more sense to look at increasing income taxes for the wealthiest Oklahomans.
"Are we thinking ahead far enough about technology and are we appropriately assessing taxation that is going to work for our future?" Dunnington said. "Or are we just being short-sighted and scrambling because we're broke and making bad decisions."