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Oklahoma Supreme Court deems ‘cigarette fee’ unconstitutional

OKLAHOMA CITY – A measure that was expected to generate more than $200 million has been ruled unconstitutional.

The last week of the legislative session featured bickering at late-night committee meetings, as lawmakers raced to pass a budget in time to avoid a special session.

One of the bills passed during that time, a $1.50 per pack fee on cigarettes, was just ruled unconstitutional by the Oklahoma Supreme Court.

Senate Bill 845 “flagrantly violates…the Oklahoma Constitution,” attorney Robert McCampbell wrote in a petition to the court. “SB 845 is the Legislature’s single largest revenue bill of 2017. Yet SB 845 became law even though it originated in the Senate, passed on the final day of the legislative session, and secured bare legislative majorities.”

The Oklahoma Constitution states “no revenue bill should be passed during the five last days of session.” It adds, no revenue bill can become law without a vote of the people or a three-fourths vote.

However, after negotiations between the parties broke down in May, Republicans unveiled bills that they said would not need Democratic support.

The cigarette fee was branded as such in an attempt to avoid classification as a revenue-generating bill, even though it’s estimated to fill more than $200 million worth of the state’s budget deficit.

“We’re trying to follow both the spirit and the letter of the law of the Oklahoma Constitution,” Rep. John Echols told NewsChannel 4 earlier this year. “The Oklahoma Supreme Court has defined revenue-raising measures as measures whose primary purpose is to raise revenue or changes in the permanent tax code. Revenue-raising measures have not been when we’ve made changes to exemptions in the tax code.”

Earlier this week, the case went before the justices of the Oklahoma Supreme Court. The fee was among four different bills passed this legislative session and challenged in three different lawsuits on Tuesday.

On Thursday morning, court documents reveal that the Oklahoma Supreme Court struck down the ‘fee’ as unconstitutional.

In the documents, Justice Patrick Wyrick said the Legislature violated the state’s constitution in an attempt to avoid a special session.

The ruling made Thursday morning said the Smoking Cessation and Act, “did not indicate the purpose of the $1.50 assessment was to reduce the incidence of smoking, nor did they mention any non-revenue-raising regulatory purpose”, according to a written ruling obtained by NewsChannel.

Now, the state has one week to request a rehearing.

If the decision stands, lawmakers may be forced to come back to the Capitol for a special session.

Gov. Fallin says that she is disappointed in the court’s ruling.

“I am disappointed to hear the Supreme Court struck down the smoking cessation fee, but I certainly respect the justices’ authority. I will be discussing with legislative leaders from both parties the need to address the $215 million shortfall this will create for the Department of Human Services, the Department of Mental Health and Substance Abuse Services and the Oklahoma Health Care Authority, the three agencies that received the bulk of the money that was to be generated by the cessation fee.

These agencies and the people they serve cannot sustain the kind of cuts that will occur if we do not find a solution. My belief is we will have to come into special session to address this issue,” Fallin said in a statement.

Minority Leader Rep. Scott Inman released the following statement:

“Once again, Governor Fallin and Republican legislators have failed Oklahoma. My caucus and I sounded every alarm bell we could to stop this from happening, yet here we area, just as we warned. Today, I’m urging Governor Fallin to call for a special session and for Republican leaders to come together with myself and Sen. Sparks and draft a truly bipartisan and constitutional budget plan that will help restore, reinvest in, and rebuild Oklahoma.

With our state agencies facing more budget cuts and with even more rulings waiting, the time is now to work out a budget agreement before a special session of the legislature. By coming together now and putting a plan in place, we can save precious time and taxpayer dollars to fix the mess that their failed leadership has put us in because of their failed policies to cut taxes for the wealthy and well-connected.

This cigarette tax was just a Band-Aid put on their gaping wound of a budget hole. Schools are down to 4-day weeks, hospitals are closing down, and public safety is in a crisis, not because cigarettes are too cheap, but because Republican policies benefiting their donors have failed us. The solution to our budget problems is much larger than a cigarette tax. We must address the structural problems with our budget by increasing the Gross Production Tax to 7%, eliminating wasteful tax credits, and actually balancing our budget in a constitutional way.”

The Oklahoma State Medical Association also released the following statement:

“Oklahoma State Medical Association, on behalf of its more than 3,000 members, is obviously disappointed that the Oklahoma Supreme Court struck down the cigarette fee, a measure with such proven benefits for public health. We hope a special session of the legislature will allow us to work with legislative leaders to pass a new measure that will save lives,” a statement by OSMA president Kevin Taubman, M.D.