2017 OAFP Legislative Update

2017 Special Session 

Governor Fallin called the Oklahoma Legislature into special session on September 25, instructing members to find a way to fix the $215 million hole left when the State Supreme Court declared the $1.50 cigarette fee unconstitutional. Fallin also outlined that the legislature should clarify intended exemptions to the new 1.25 percent vehicle sales tax, find more efficiencies in all areas of state government and discuss a pay increase for teachers. The legislature also would have the ability during special session to find a long-term solution to the continuing budget shortfalls. Speaker McCall has said that the most likely revenue source is a cigarette tax but if he isn’t able to get the supermajority that is needed in the House to pass the measure, he will send it to a vote of the people.

That means the funds, if voters approve the tax, will not be available immediately and thus will not address the budget issue for the upcoming fiscal year. The OAFP has supported the tax continually with a coalition of health-related entities because of the health benefits associated with increasing the cost of cigarettes and the chance to stabilize or restore provider rates with the funds.

 

2018 Session Outlook 

Because much of the budget from the 2017 session was one-time funds, the likelihood is high that much of the 2018 session will center around the budget once again unless members address a long-term solution to the budget during special session. Legislators used $81 million from the Rainy Day Fund and about $265 million from state agency revolving funds, which means $346 million that might not be available next session. Unless members address revenue sources, this could mean cuts to agencies once again, and because 2018 will be an election year, votes approving tax increases or raising revenue are less likely. This could mean, once again, provider rate cuts. In addition, Sen. Thompson, who is running for pro tempore, has proposed legislation that would require the legislature to write budget limit bills for agencies detailing how to spend state allocations. This was the practice previously but legislators stopped writing budget limit bills when the state’s budget woes began in the last few years.

Though the budget will likely overshadow much of the 2018 session, the OAFP legislative team will keep an eye on many other health-related issues that will likely arise.