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House Speaker: Special session another chance to pass the cigarette tax

OKLAHOMA CITY – After a ‘cigarette fee’ was deemed unconstitutional by the Oklahoma Supreme Court, House Republican leaders say they will try to pass the measure again when they meet in special session.

Last month, the Oklahoma Supreme Court ruled that a $1.50-per-pack ‘cigarette fee’ was unconstitutional after lawmakers passed the revenue raising measure in the final five days of a legislative session without a 75 percent majority vote.

The fee was expected to generate $215 million for several state agencies. However, officials say the loss of matching federal funds brings the total loss to nearly $500 million.

Authorities say the Department of Human Services would have received about $69 million, the Department of Mental Health and Substance Abuse Services would have received $75 million and the Oklahoma Health Care Authority would have received $70 million.

Officials say the agencies will likely run out of funding before the start of the legislative session.

The Department of Mental Health and Substance Abuse Services says it will run out of funding in November, while the Oklahoma Health Care Authority will run out of state funds in January.

DHS says it would only be able to make it until May.

On Wednesday, Gov. Fallin announced that she would be calling lawmakers back to the Capitol for a special session to help fill the budget hole later this month.

House Speaker Charles McCall said it is simply another opportunity for House Republicans to move forward on the cigarette tax.

In a news release, McCall said that the Legislature will likely take up the cigarette tax and use existing cash from the Rainy Day Fund and money available from the 2017 fiscal year to address the budget hole.

“The cigarette tax is the only feasible tax option Oklahomans have said they would support. It would help us replace the funds lost when the Court rejected the cigarette fee,” said Speaker McCall. “Unlike our Democratic colleagues, House Republicans have no intention or desire to tax the life out of Oklahomans just to grow government – especially at a time when our citizens are living on less. We are not going to raise a billion dollars in taxes to fill a $215 million budget hole.”

McCall said if it fails to pass, they will sent it to a vote of the people and use targeted cuts to make up the difference.

“House Democrats have shown time and again they are not going to help pass the cigarette tax despite it being the most feasible among Oklahomans,” said McCall. “They have not supported the cigarette tax during either of the last two legislative sessions, and we have no reason to believe special session will be any different. If they refuse to support the cigarette tax again, any further cuts to state agencies will be on them. The Court struck down the cigarette fee, so the easiest path to replacing the funds is to pass the cigarette tax.

“House Republicans will convene in special session, as we are obligated to do. But we have to make decisions that are in the best interests of the citizens who sent us here, not what is in the best interest of special interests or bureaucrats.”

House Minority Leader Scott Inman released the following statement after Gov. Fallin’s announcement about the special session.

“While our caucus is grateful that Governor Fallin has begun preparations for a special session, we are still concerned that Republican leadership has yet to put forth a plan to fix the budgetary mess they have created. After almost a month since the Supreme Court ruled the cigarette “fee” unconstitutional, the clock continues to tick on finding a path forward. House Democrats, along with the Governor and Senate leadership have met in good faith to come to an agreement that will allow us to improve our state. While House Republicans seem content with making “adjustments”, the people of Oklahoma deserve better.
Today, we urge Speaker McCall to provide a detailed, bipartisan plan to ensure that the upcoming special session is productive and beneficial and not just window dressing to appease wealthy special interests at the expense of everyday Oklahomans. If the Speaker or others are interested in such a plan, House Democrats put out our Restoring Oklahoma plan in March, which can be found at http://www.oklahomahousedems.org/restoring-oklahoma-plan.”

Officials say the special session is expected to cost about $30,000-a-day.