News Release

What OKFB policy says about the Step Up Oklahoma plan

February 8, 2018  • Public Policy

A group of business, civic and community leaders last month released a proposal to fix Oklahoma’s continual budget problems called Step Up Oklahoma, which includes a number of revenue measures and government reforms.

The plan was touted by Gov. Mary Fallin in her eighth and final State of the State address on Monday, and has been supported by various individuals and organizations across the state.

Oklahoma Farm Bureau is committed to policy that advances not only rural Oklahoma, but also the entire state. Below, find OKFB policy on the specific tenants of the Step Up Oklahoma plan being considered by the state legislature.

Motor fuel tax

Included in several budget proposals over the past year, the plan proposes a 6-cent increase on gas and diesel taxes.

OKFB policy states, “We support a fuel tax increase capped at 6 cents per gallon, dedicated to roads and bridges with counties receiving a portion of the revenue.”

A 6-cent increase in motor vehicle fuel taxes is expected to generate $170.4 million, according to the Step Up Oklahoma plan. The revenue from the fuel tax increase would be placed in the general revenue fund for the first year to help fill the budget shortfall.

Oil and gas production tax

The plan also calls for an increase in gross production tax on oil and gas.

Existing wells currently taxed at 2 percent would be increased to 4 percent. All new wells would be taxed at 4 percent for the first 36 months, then increase to 7 percent. The GPT measure is expected to generate $133.5 million.

OKFB policy states, “Increases in the gross production tax would be disastrous for the state’s petroleum industry, and would be a tax increase to mineral owners.”

Gross production tax on wind

A new tax on wind production also is included in the plan, charging $1 per megawatt hour produced. The proposal is expected to generate $23 million.

OKFB policy states, “Oklahoma needs to capitalize on wind production with a competitive tax rate.”

The governor’s plan also includes a $1.50 per pack increase on cigarette taxes, increased taxes on chewing tobacco and little cigars and changes to the state’s income tax structure. 

The Step Up Oklahoma plan would provide an estimated $749.7 million, with $285 million allotted for a $5,000 teacher pay raise.

Reforms include lowering the super majority threshold required to pass revenue-raising measures, establishing a reliable funding mechanism to protect the budget in economic downturns, requiring line-item budgets, creating an independent budget office to uncover waste, fraud and abuse, adjusting term limits for state legislators to 16 years, increasing accountability of state agencies, running the governor and lieutenant governor on the same ballot, changing the process for filling Supreme Court vacancies, and granting voters at the county level to customize the makeup and form of their county government.

Amidst the budget negotiations, OKFB’s priorities remain keeping property taxes low, enhancing rural healthcare, preserving the agriculture sales tax exemptions, and protecting private property rights.