Oklahoma House passes revenue measures in late-night session

OKLAHOMA CITY (AP) — The Oklahoma House worked into the early morning hours Friday as it struggled to pass bills that legislative leaders say are needed to help fill a projected $1.3 billion hole in next year's state budget.

Two measures, one to eliminate what's considered a double deduction for state income taxpayers and another that adjusts the state's earned-income tax credit, were sent to Gov. Mary Fallin to be signed into law.

The other that caps a tax incentive for oil and natural gas wells was sent back to the Senate after being amended on the House floor.

Combined, officials estimated the three bills will save an estimated $240 million in state revenue that is currently lost to tax incentives, credits and deductions.

Other proposals to raise or save revenue, including a proposed $1.50-per-pack hike in the state cigarette tax that would raise about $180 million a year, are still being negotiated. The Legislature is constitutionally required to adjourn by May 27.

The House voted on the final measure at 12:24 a.m. and then adjourned until 10 a.m. Friday after House members suspended a rule that requires them to adjourn by midnight.

Earlier in the night, the House voted 93-2 for the measure that caps a tax credit for so-called "at-risk" oil wells because they produce little profit. It allows producers to recoup nearly all of the taxes paid on production.

House Speaker Jeff Hickman, R-Fairview, said the bill caps the credit at a total of $12.5 million and requires that oil wells produce 10 barrels a day or less to qualify. Hickman said the measure will restore about $120 million in revenue for schools and other services.

The Oklahoma House voted 51-45 to adjust the earned-income tax credit claimed by 355,000 low-income Oklahomans.

The measure makes the earned income tax credit nonrefundable effective this tax year. The state credit is equal to 5 percent of the federal earned income tax credit. Officials say the measure will increase state income tax collections by about $29 million in 2017.

Opponents say it targets the working poor. Rep. Eric Proctor, D-Tulsa, said it impact single mothers and others in his and other districts throughout the state.

"And the world turned upside down," Proctor said, noting that the bill and other revenue-raising measures were developed by conservative leaders of the Republican-controlled House.

But supporters said the measures are needed to help fill the hole in next year's state budget.

The House also passed legislation to eliminate what's considered a double deduction for state income taxpayers. The House voted 51-42 late Thursday for the Senate-passed measure after voting 50-45 against the bill earlier Thursday.

The bill eliminates an income tax deduction that allows Oklahoma taxpayers to deduct state income tax they claim on their federal income tax return from their state return. Supporters say the measure will save the state an estimated $90 million a year for state services like education, health care and public safety.

It now goes to Fallin to sign.

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House Bill 1577: http://bit.ly/1TKaOuK

House Bill 1604: http://bit.ly/1NBfZRt

House Bill 1606: http://bit.ly/1W5AFUj

TIM TALLEY, Associated . PressCopyright 2016 The Associated Press.
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The Gayly - 5/20/2016 @ 11:43 a.m. CDT