OKLAHOMA CITY – After Gov. Mary Fallin announced that she would be calling lawmakers back to the Capitol for a special session, a local group is speaking out against the move.
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.
Although the legislative session is not supposed to begin until next year, Gov. Fallin says lawmakers need to get to the Capitol to fill the budget hole left by the ruling.
“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.”
On Wednesday, Gov. Fallin announced that she plans to call a special legislative session to adjust the current fiscal budget later this month.
“I am planning on calling a special session beginning September 25 for legislators to adjust the current fiscal year budget. A formal call for a special session will be issued in the next few days, but I wanted to announce my intention to call a special session for planning purposes. I also want Oklahomans to know we are working diligently to address the fiscal matters of our state.”
Following the announcement, the Oklahoma Council of Public Affairs released a statement, saying that there isn’t a revenue issue with the state and there is no need for a special session.
“There is simply no need for a special session. For the fiscal health of Oklahoma, officials should look into moving funds already available instead of proposing hundreds of millions of dollars in new and damaging tax increases on hard-working Oklahoma families. If the executive branch is creative enough to completely drain our state’s constitutionally protected Rainy Day Fund for $240 million, then they are creative enough to allocate a portion of TSET’s $1 billion endowment. Doing so, along with using surplus revenues, would completely meet the cash flow needs of the agencies affected by the loss of cigarette tax money until February when the Legislature reconvenes,” OCPA President Jonathan Small said in a statement. “For the long-term fiscal health of Oklahoma, state officials need to focus on state spending. Oklahoma state government is now on track to spend more money next year—more than $17.9 billion—than at any time in state history. The simple truth is we don’t have a revenue problem; we have a spending and a transparency problem. Hard-working Oklahoma families and small businesses are already chafing from the constant demand of tax consumers. It would be destructive and repugnant for the Governor and the Legislature to come into special session—costing taxpayers around $30,000 per day—just so they can pass whichever tax increases Scott Inman deems best.”
However, experts say it is not as simple as just moving funds from one area to another.
Instead, many funds are earmarked for specific purposes.
Officials with the Tobacco Settlement Endowment Trust told KFOR that funding cannot simply be moved from their designated fund because of a revenue shortfall.
“The TSET endowment is a model for the nation on how to use the Master Settlement Agreement payments for long-term health improvement and to decrease the toll of tobacco. Just last week, national data showed that adult smoking in Oklahoma was at an all-time low and adult obesity had declined. An outside academic study has shown that because of TSET, Oklahoma’s smoking rates have dropped 10 times faster than similar states. Any change to how TSET is funded, how endowment earnings are used or how the TSET endowment’s annual Master Settlement Agreement payments are used would require a vote of the people to change the constitution. Finally, as no one could guarantee the outcome of the vote by the people, TSET is not a guaranteed source of funds to meet immediate fiscal needs. If such a measure were to fail at the ballot box, the legislature would be facing the same situation,” John Woods, TSET Executive Director, told KFOR in a statement.
Officials with TSET pointed out that the Oklahoma Council of Public Affairs was one of the 2016 recipients of charitable contributions from Altria, a parent company of Phillip Morris- the maker of Marlboro and several other brands of cigarettes.