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House repeals hotel/motel tax in revenue bill, heading to Senate

OKLAHOMA CITY — Less than 24 hours after the Oklahoma Senate passed a revenue bill, the House has voted to repeal a tax that was expected to generate nearly $50 million.

HB1010XX, a $447 million tax increase, passed the Senate floor Wednesday evening in order to fund an average $6,000 pay increase for teachers, money for support staff, state employees and textbooks.

In the bill, tax increases include:

  • Gross production tax (GPT) is raised to 5 percent
  • 3 cents on unleaded gas, 6 cents for diesel
  • $1 for tobacco products
  • $5 hotel/motel tax

However, in a 69-26 vote Thursday, the House voted to repeal the hotel/motel tax through HB1012XX. Sen. Greg Treat, R-Oklahoma City said the expected revenue generated from that tax would have been around $47 million but there were concerns.

“A lot of people were extremely concerned about the adverse impact to conventions in Oklahoma City and Tulsa but other cities as well that have tourism taxes,” Treat said.

The push to repeal did not sit well with some House Democrats.

“It took us nearly 30 years in this building to raise taxes, and about 72 hours to turn around and cut them again,” said Rep. Jason Dunnington, D-Oklahoma City. “And, we wonder why the public doesn’t trust us, and we wonder why the public’s frustrated with us, why they’re unsure if they want to send us back again for another term.”

Treat said without the promise of a repeal, HB1010XX would not have secured enough votes to pass the Senate floor on Wednesday. Even without money from the hotel tax, he said teachers will still get their pay raise.

“We just have to use some other funding streams to be able to fill the $47 million that was expected from the hotel/motel tax,” Treat said.

Rep. Cory Williams, D-Stillwater told News 4 opponents to the repeal have questions as to how the revenue will be replaced should the repeal be signed into law.

"I’ve been told ‘Trust us’ too many times in this building as have teachers for about the last decade. I don’t trust. If you’ve got a bill that’s going to raise revenue, put it on the bill at the same time and let’s get something done," Williams said.

Senate minority leader John Sparks, D-Norman said the passage of HB1010XX was a "vital step", but it's not an end-all solution.

"In the second year we’re going to lose $100 million out of the package," said Sparks. "As the bill was written that was passed last night [Wednesday], the cigarette money that goes into education this year will be diverted to healthcare next year without a specific revenue replacement."

While Governor Mary Fallin did sign HB1010XX on Thursday, the Senate still has the opportunity to consider the repeal. The earliest they can take it up is on Tuesday.