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Cigarette tax, tribal gaming changes: Oklahoma representative releases his plan to fix budget shortfall

OKLAHOMA CITY – Time is ticking for state lawmakers to reach a budget agreement to fill a nearly $500 million gap.

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.

Officials say the loss would result in several state agencies running out of funding before the start of the legislative session.

“A special session is the best option,” Gov. Fallin said. “Failure to meet in special session would mean $215 million would be cut mostly from these three state agencies. These agencies and the people they serve cannot sustain the kind of cuts that will occur if we do not find a solution.”

Governor Mary Fallin

Earlier this month, Gov. Fallin announced that she plans to call a special legislative session to begin on Sept. 25 to adjust the current fiscal budget.

Now, an Oklahoma representative says he has a plan to fill budget hole and create recurring revenue for the state.

House Appropriations and Budget Committee Chair Rep. Kevin Wallace said his plan involves several different proposals like the cigarette tax and changes to tribal gaming.

“When the Supreme Court overturned the cigarette fee, it created a situation for our state agencies similar to a revenue failure,” said Wallace. “As a Legislature, we need to address the lost revenue. My plan would not only provide the lost revenue, but it would provide recurring revenue for the Legislature to utilize in next year’s budget hole and beyond without burdening citizens. My hope is the Legislature would come together in a bipartisan way for the state’s best interest and not for personal interest.”

Wallace says he wants to pass the $1.50-per-pack cigarette tax, use a portion of existing cash and utilize 25 percent of the Rainy Day Fund to help with the budget shortfall.

However, he says he also wants to modify tribal gaming to allow ball and dice games in exchange for vehicle registration rebates paid to the tribes.

A similar proposal was halted in the Senate Joint Committee on Appropriations and Budget last legislative session.

“The proposal allowed the tribal casinos to use dice and a ball in games that they already do, and would have brought in $20 million to the state this year alone without raising a single tax,” said House Majority Floor Leader Jon Echols in a statement to News 4.

But Senate President Pro Tem Mike Schulz has said he does not to support an expansion of gambling laws to allow full-blown Las Vegas-style gambling. Schulz says the bill would authorize sports betting if a federal ban is lifted by Congress.

“For me, personally?” said Senate President Pro Tempore Mike Schulz in May. “Yeah, it’s a moral objection.”