Oklahoma lawmakers are struggling with a $900 million budget shortfall.
With this year’s legislative session is winding down, some Oklahomans are starting to say lawmakers need to raise taxes to pay for vital government services like education, mental health and public safety.
No one actually wants their own tax bill to rise, so minority party politicians and amateur pundits are targeting Oklahoma’s oil and natural gas industry.
This industry is an easy target, since it is omnipresent in Oklahoma.
The names of oilmen, past and present, and their companies grace countless streets, buildings and other landmarks across the state. But look beyond the obvious, to the real numbers.
Oklahoma’s oil and gas industry employed about 150,000 people in 2015, while supporting another 291,000 jobs in other sectors. It paid $2 billion in direct taxes in fiscal year 2015. Its activity is propping up communities across Oklahoma, where drillers are unlocking the hidden bounty beneath our state’s red dirt.
Oklahoma has been an oil and gas state since the beginning, but the American shale revolution has changed its outlook. It has allowed our state to once again emerge as a major oil and gas producer, but at a price. Newer horizontal wells are exponentially more expensive than traditional exploration techniques.
That is why Oklahoma enacted a gross production tax just two years ago that charges producers at a lower rate during the first 36 months of a new well’s life to offset their higher well costs, before rising to the standard 7 percent for the rest of the well’s life.
Read the full article at the Journal Record.