May 2017 Editorial Contest Winner

Seems an obvious choice
J.D. Meisner, Bristow News

When the voters defeated State Question 779 last November and killed the plan for a one-penny sales tax intended to fund a $5,000 annual raise for Oklahoma's teachers, Legislators at the state capitol misinterpreted the message taxpayers were sending.
Some said the people of Oklahoma were saying they did not want to give teachers a pay raise.
Others said Oklahomans just proved they did not want to increase taxes.
The reality is, Oklahomans voted down 779 in hopes that the Legislature would do its job and find a solution that did not put this burden on already strapped taxpayers.
So far, this has not happened.
The Legislature did pass a bill this session intended to give teachers an incremental salary increase, but a funding source for this was not included in the bill so it was an empty promise and therefore an insult to Oklahoma's educators.
Until last week, the Legislature had completely ignored the elephant in the room – the energy sector.
Among oil producing states in the continental U.S., the Sooner State has the lowest gross production tax on new wells.
According to the Covenant Consultant Group, Oklahoma's ad valorem tax rates paid by oil and gas in 2016 was 3.2 percent, Idaho was 4 percent, Texas and North Dakota were 8.3 percent, Arkansas was 12 percent and Louisiana was 13.3 percent.
When horizontal drilling was in its infancy in the 1990's, the state of Oklahoma introduced a tax incentive for directional wells to help promote this new technology and taxed wells at a rate of one percent for the first 48 months of production.
This incentive was set, by law, to expire in 2015, which would have allowed the state to begin taxing horizontal wells at the commonly accepted rate of seven percent.
But legislation introduced into the Oklahoma Senate in 2014 changed all that. With the state in the throes of a worst-case-scenario budget crisis, then Lawton Republican Senator T. W. Shannon inexplicably introduced a bill to make permanent a two-percent gross production tax on directionally drilled wells, essentially keeping the outdated incentive in place – and the legislature inexplicably passed it.
According to research provided by We Are Together OK, allowing the state to tax wells at seven percent instead of two percent would have increased the state's revenue by more than $200 million a year, most of which would have gone to Oklahoma's school districts.
In one fell swoop, the 2015 Legislature cost the state of Oklahoma more that 500 million in potential gross production tax collections from 2015, 2016 and 2017.
Today, every Legislator in Oklahoma needs to ask himself or herself if they want to be part of this old-school legacy, or if they want to break away from the status quo and admit that this two percent gross production tax is robbing the state of much needed revenue.
On Wednesday, the Oklahoma Oil and Gas Association called out House Minority Leader Scott Inman's claims that the state could raise as much as $500 million a year if the GPT was raised to seven percent and said that figure would be more like $20 million.
If this is true, should it be a reason for the legislature to not increase the GPT at all? Is $20 million so inadequate that we should force our school districts to continue making cuts instead?
OKOGA argues that increasing the GPT would result in a decline in drilling activity and, therefore, a loss in revenue. Are they really going to stop drilling for oil? Where are they going to go? Texas? The rate there is 8.3 percent.
There are new holes being drilled in Louisiana where the GPT is 12 percent.
Should we continue to ask our school districts to make deeper and deeper cuts because some members of the legislature would rather subsidize an industry that is raking in millions of dollars per year in profits?
Teachers across Oklahoma are being laid off, classroom sizes are increasing, school boards can no longer afford to buy new textbooks and school districts are going to four-day weeks just so they can afford to keep the lights on.
The Oklahoma Highway Patrol is limiting troopers to 100 miles a day because the Department of Public Safety cannot afford to buy fuel.
Yesterday, the Oklahoma Department of Transportation announced is considering curtailing road construction and maintenance projects due to concerns that it can no longer afford them.
The wheels are coming off.
The legislature needs to be decisive and act now or it will be too late, but there is still dissent in the ranks.
The recent election almost certainly sent a number of newly elected Legislators to Oklahoma City determined to make good on campaign promises not to raise taxes.
Our own contingent, to their credit, Senator James Leewright, R-Bristow and Representative Kyle Hilbert, R-Depew, both said this week that they would not be opposed to a gross production tax increase on certain oil wells.
But what are the rest of those knuckleheads going to do?
Oklahoma's small oil producers have spoken in favor of a GPT increase.
They primarily drill vertical wells and are already paying the seven percent gross production tax.
These are the folks who live here, whose children and grandchildren go to Oklahoma's schools. They want to see the oil giants pay the same taxes they do.
They want to see Oklahoma recover and prosper and they know that will never happen if we continue down this road of inaction and empty promises.
Granted, increasing the gross production tax on horizontal wells will not fill the budget hole, but it is a very big shovelful and every shovelful brings us closer to a solution.

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