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Oklahoma Senate passes revenue package with increase in GPT

(KOKH/FILE)

The Oklahoma Senate has passed a revenue package that includes an increase in the Gross Production Tax.

Senators took up a revised HB 1035 Monday. The bill, which features a $1.50 cigarette tax increase, a six cent fuel tax increase an alcohol consumption tax, was amended to include an increase in the Gross Production Tax. The bill puts an increase of the tax of four percent for 36 months on new wells and two percent on legacy wells.

The bill passed with a vote of 37-5 and will head to the Oklahoma House of Representatives.

It is identical to a bill that stalled out at an 11-11 tie in the House Joint Committee on Appropriations and Budget last week.

An increase in the GPT has long been an item Democrats have wanted added to the bill.

"What happened today was bipartisan. You saw both groups come together in the Senate and do the right thing," Senate President Pro Tem Mike Schultz said after the vote.

"If people want a teacher pay raise, if they want a state employee pay raise, if they want earned income tax credit to be refundable, this is the pathway to get that," said Sen. Greg Treat, R-Majority Floor Leader.

Senate leadership did not notify the Governor or House that they'd be voting on the bill.

"I don't think the House should be surprised that the members of the Senate, both Republicans and Democrats, want and continue to want resolution to this special session that we're in, in a responsible way," Sen. Schulz said.

The bill is supposed to raise $132.9 million for FY 2018. When added to a bill signed by the governor to appropriate $23 million in Rainy Day Fund money, it would leave Oklahoma with a $57 million budget hole, Senate leaders said.

In FY 2019, the bill author said HB 1035 would raise $426.5 million.

Related: Governor Fallin applauds Senate revenue package, urges action from House

The leader of Oklahoma House, Speaker Charles McCall, called on the Senate to pass several "plan b" measures that pull a one time appropriation from carry-over funds to bridge part of the budget gap and keep at-risk state agencies from major cuts.

"We have the ability and the vehicles in place to make that happen this week. We need to move those forward through the process. We need the governor to sign those, to provide certainty that health care coverages. All aspects will be protected and will continue to be rendered by state agencies," McCall said.

There is no indication on whether McCall will bring the Senate's version of HB 1035 to a vote.

Moody's Investor Service issued a "credit negative" warning for Oklahoma on Monday.

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