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Proposed measure to increase tax on cigarettes fails to pass Oklahoma House

OKLAHOMA CITY – A measure that would increase the tax on cigarettes has failed to pass out of the House of Representatives.

During her ‘State of the State’ address, Fallin asked lawmakers to raise the cigarette tax, adding that smoking claims the lives of Oklahomans and costs the state $1.62 billion in health care related expenses. She made a personal appearance on the house floor Monday in an attempt to whip up more support.

House Bill 2372 called for a $1.50 per pack tax on cigarettes to raise revenue for several different health organizations.

For the first year, the money raised from the cigarette tax would have gone toward the Health Care Authority Enhancement Fund, Mental Health and Substance Abuse Services Enhancement Fund, Human Services Enhancement Fund, Oklahoma State University Medical Authority Enhancement Fund and Health Department Enhancement Fund.

After July 1, 2018, 100 percent of the revenue from the cigarette tax would be sent to the Health Care Enhancement Fund.

For months, health care professionals have been pushing lawmakers to approve the tax on cigarettes. They warned, if the cigarette tax failed, more than a dozen hospitals and as many as one in 10 nursing homes may be forced to close.

“I’m currently working with seven hospitals in the state of Oklahoma right now that are living payroll to payroll. Every week, we decide how we can make payroll this week,” Rick Wagner, a CPA working with rural Oklahoma hospitals, told NewsChannel 4 in April.

Advocates said the tax could raise $184 million a year for health care in our state.

However, opponents said it is simply a tax on a low-income segment of the population, and they point out the state could lose revenues along the borders if smokers cross state lines to buy cigarettes and avoid the higher tax.

"We know that it’s not substantial, it’s not recurring, it’s not going to fix the problems in the long run," said Democratic Rep. Mickey Dollens. "It was a bipartisan effort to kill a bad bill."

On Monday afternoon, House Bill 2372 went before the House of Representatives. As the votes began to roll in, it was apparent the measure was in trouble.

Several lawmakers on both sides of the aisle broke with party lines during the vote, which caused the measure to fail.

In all, 14 Democrats and 20 Republicans voted against the bill.

The final vote was 63 to 34 in favor of the measure. Since it is a revenue bill, it required 76 votes to pass.

House Speaker Charles McCall cast blame on Democrats after the vote, saying Republicans had done their part.

"Unfortunately, the minority caucus, the democratic caucus only put 46 percent of their caucus on the board to vote for [the cigarette tax]," he said.

Minority Leader Scott Inman pushed back, saying Republicans are the ones who could have made the difference.

"The Speaker must either be bad at math or bad at leadership," the Del City Democrat said. "When 21 members of his caucus versus 14 members of my caucus actually oppose the legislation, all the Speaker needed was 10 additional votes."

Inman and Democrats who opposed the bill said they wanted an increase in taxes for new oil and gas wells in exchange.

"Otherwise, we’re just shifting the burden onto the backs of poor and working class Oklahomans and expecting them to fill up the budget gap that leadership from the past 8 years has caused," Dollens said.

Gov. Mary Fallin expressed her disappointment in a statement:

“I’m disappointed in those legislators who put political games and Washington-like gridlock ahead of the lives of Oklahomans and the core services our citizens expect. It’s personal to those of us who have lost loved ones to smoking-related illnesses. It’s personal to teenagers in Oklahoma who would have been saved from lives of tobacco addiction if the bill had passed. It’s personal for citizens who would have received health care from the new revenue. I encourage all citizens to contact legislators and urge a yes vote on a smart way to protect the health of our citizens and the health of our state services."

The Speaker maintained the cigarette tax is not dead and vowed to bring it up again.