OKLAHOMA CITY — Gov. Mary Fallin on Thursday signed a historic tax hike bill that will fund teacher pay raises.
The House and Senate earlier this week managed the supermajority of votes necessary to get House Bill 1010xx to Fallin’s desk.
“This is a very historic moment in Oklahoma,” Fallin said at a bill-signing ceremony Thursday.
Passage of a revenue-raising measure took one regular session and two special sessions, Fallin said.
The governor thanked lawmakers for their hard work and dedication to passing the funding for the raises after several packages were considered.
She said lawmakers put some hard votes on the board.
The measure will generate around $400 million for the raises. It will:
• Add $1 to a pack of cigarettes.
• Add 3 cents to a gallon of gasoline and 6 cents to a gallon of diesel.
• Raise the gross production tax to 5 percent from 2 percent.
It also would have added a $5 lodging fee per room to hotels and motels that have more than three rooms.
But House members earlier Thursday passed legislation repealing that section of the bill at the request of the Senate over concerns it would hurt the state’s tourism industry.
Teachers have said they would walk out Monday if raises and additional dollars for support staff and schools were not forthcoming. There is still a plan for a Monday walkout.
Lawmakers have not passed a tax hike since voters approved State Question 640 in 1992. The measure requires a supermajority in both chambers of the Legislature or a vote of the people to raise taxes.
Fallin also signed House Bill 1023xx that establishes the pay raise schedule, which will be about $6,100 on average per teacher, with those with more experience getting a higher bump.
Fallin said it is the largest teacher pay raise in state history. She said she hopes it will reduce the number of Oklahoma educators who leave for better pay in other states.
Teachers asked for a $10,000 raise over three years, with $6,000 in the first year.
Fallin also signed House Bill 1011xx, which will cap itemized deductions at $17,000, with exceptions for charitable donations and medical expenses.
Hotel tax repeal
HB 1010xx hung in the balance for several hours Thursday while House leadership hunted down the votes to bring up a trailer bill that repeals sections of the earlier measure.
Leadership needed a two-thirds majority — 68 votes in the House — to suspend the rules to amend House Bill 1012xx so that it repeals a lodging tax that was part of HB 1010xx, the landmark revenue bill passed by the House on Monday and the Senate on Wednesday, but held by the Senate on what’s known as a motion to reconsider.
By doing so, the Senate left open the possibility of rescinding its vote on the revenue bill unless the House acted to repeal the hotel/motel tax.
The repeal reduces the overall value of HB 1010xx from $447 million to something in the vicinity of $400 million. House Democrats said they would not go along with the change unless they were shown how the lost revenue would be recouped.
With a handful of Republicans set against the tax increase and a few others absent, leadership found itself a vote short and wound up sending the Highway Patrol to get Rep. John Enns, R-Enid, to move the bill forward.
HB 1012xx, once amended, eventually passed 69-28, and was sent to the Senate.
The Senate, in turn, released HB 1010xx and an accompanying bill for Fallin’s signature.
While there had been some discussion about tightening internet sales and use tax collections to make up the difference, no such legislation was introduced Thursday.
Democrats argued the revenue package was $75 million short to begin with, and is now about $125 million short.
House Republican leadership said growth revenue and some leeway within the package itself will cover the difference.