State and Local Strategies of the Tobacco Industry
A STATE TAX PLAN - OKLAHOMA
Abstract
Discusses plans to prevent increases in excise taxes in Oklahoma. Includes the following sections: 1) Political and Legislative Situation, containing legislative outlook for 1984, legislative process information, support groups including Tobacco Action Network, Retailers and Retailer Organizations, Tobacco Institute, Industry Members and Subsidiaries, Allied Industries, and Business Associations, and a historical background of cigarette taxes in California; 2) Position Papers on a Cigarette Tax Increase in California, containing reasons for opposing cigarette taxes, a "one page fact sheet for legislators," and discussion of economic impact of cigarette tax increases; 3) Legislative Strategy.
Fields
- Named Organization
- ADVISORY COMM ON INTERGOVERNMENTAL REL
- BATF, BUREAU OF ALCOHOL,TOBACCO AND FIREARMS
- BROOKINGS INSTITUTION
- CANTEEN SERVICE OF OKLAHOMA CITY
- CBS
- CHAIN DRUG REVIEW
- CITIZENS CAMPAIGN AGAINST BOOTLEG CIGA
- CONSOLIDATED WHOLESALE
- CONVENIENCE STORE NEWS
- EDS PIPE SHOP
- HALE HALSELL
- INDIAN NATION WHOLESALE
- NATL CENTER FOR HEALTH STATISTICS
- NY STATE COMM OF INVESTIGATION
- NY STATE SPECIAL TASK FORCE CIGARETTE
- OK CHAMBER OF COMMERCE
- OK DEPT OF HUMAN SERVICES WELFARE
- OK HOUSE COMM ON REVENUE + TAXATION
- OK MANUFACTURERS' ASSN
- OK RETAIL TOBACCO DEALERS ASSN
- OK SENATE FINANCE COMM OK
- OK STATE ACTIVITIES POLICY COMM
- OK STATE EQUILIZATION BOARD
- PM, PHILIP MORRIS
- RJR, R.J.REYNOLDS
- SUPERMARKET BUSINESS
- TAN, TOBACCO ACTION NETWORK
- TINDER BOX
- TREAS, DEPT OF THE TREASURY
- TTC, TOBACCO TAX COUNCIL
- Named Person
- BOMAN,S
- BUXTON,J
- CAREY,H
- COMBS,M
- CROSS,R
- CURRAN,PJ
- DONATI,A JR
- DYCUS,D
- DYE,R
- HARVEY,T
- JOINER,F
- KELLY,P
- KEMP,J
- KIRK,E
- LEHMAN,JJ
- LOTT,T
- MARTIN,P
- MENTZER,D
- MITCHUM,R
- NIGH,G
- ROCKEFELLER,N
- SANFORD,W
- SOHN,A
- TULLY,JH JR
- WILLIS,W
- Wilson, M. (Mgr. Engineering, Planning & Admin, B&W RD& E, 1987)M. Wilson was Manager of Engineering Planning & Administration for B&W in the RD&E Department in 1987. (Source: B&W's Initial Disclosure, State of Texas vs. ATC, et al., 6/5/96)
- YORK,M
- Author
- TI, TOBACCO INST
- Region
- New York
- OKLAHOMA
- Subject
- Cigarettes
- economics
- Industry Strategies
- legislation
- Politics
- Smuggling
- State Level
- Taxes
- Trade Associations
- Advocacy Groups
Document Images
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THE TOBACCO INSTITUTE
POST OFFICE BOX 8269.
LIBBIE SQUARE
1801 LIBBIE AVENUE
RICHMOND, VA 23226.
804r'282-4275
A STATE TAX PLAN - OKLAHOMA
The State Tax Plan is for the use of the lobbyist
in Oklahoma under the directorship of the State
Activities Division of The Tobacco Institute.
August 10, 1983
NATIONAL OFFICE # 1875 1 STREET. NORTHWEST - WASHINGTON, DC 20006 9 202/457-4800'
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A STATE TAX PLAN - OKLAHOMA
I. Political and Legislative Situation
A. Legislative Outlook for 1984
1. Overview of 1983 Session to Date
2. Threat of Cigarette Tax Increase for 1984.
B. Make-up of the Legislative Process
1. Governor
2. House
3. Senate
C. Support Groups
D. Historical Background of the Cigarette Tax
in Oklahoma
II. Position Papers on a Cigarette Tax Increase in Oklahoma
A. Reasons for Opposing an Increase in the Cigarette Tax
1. Unfair and Selective Tax
2. Regressivity
3. Effects on Economy
4. Cigarette Bootlegging in
Oklahoma
5. Declines in Sales and Per Capita
B. One Page Fact Sheet for Legislators and Other
Interested Parties
C. Economic Impact of an Increase in the Oklahoma Cigarette
Tax Rate
1. Table derived from Econometric Sales Model for
Oklahoma
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A STATE TAX PLAN - OKLAHOMA (continued)
III. Legislative Strategy
A. Short Term Strategy
B. Long Term Strategy
C. Support Materials
1. List of Qualified Individuals Who Will Testify
2. Question & Answer Format for General Use
3. Bills Pending as They Become Available
4. Summary Studies
(a) Bootlegging Background Paper (Emphasis on
New York Situation) - This report is in-
cluded as a similar situation could happen
in Oklahoma.
(b) Graphs and Tables
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Section I-A-1
Overview of the 1983 Session (as of August 10, 1983)
The only bill in the 1983 session that was of particular
significance to the tobacco industry as far as taxes go was
House Bill 1325 which, if enacted into law, would repeal the sales
tax exemption for tobacco products and beer. This would have
increased the state tax on a package of 20 cigarettes by two cents;
and since many towns and cities have local sales taxes as well,
additional local taxes would have been added on. The current
Oklahoma:state sales tax is two percent...two cents on the dollar.
There is no limit to the amount of local sales taxes the cities
can levy. The removal of the exemption on tobacco products would
have raised an estimated $7.9 million for the state: $7.6 million
on cigarettes and $.3 million on other tobacco products.
In Oklahoma the two percent state sales tax is dedicated to
the operation of the Department of Human Services - Welfare.
Oklahoma has in the last two years suffered a devastating drop in
state tax revenue. The drop in the price of oil, while helpful
to the average person and the traveling motorist, created havoc
in the Oklahoma gross production tax. The increasing number of
unemployed also decreased the number of people paying income and
sales taxes and caused increased state expenditures for welfare
and unemployment benefits.
In Oklahoma there is a constitutional budget balancing
requirement. Each year, the State Equalization Board certifies
to the Legislature the amount of money that will be available
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for appropriation during the next fiscal year. The Board's certi-
fication is based on information supplied by the tax commissioner,
the state budget officer and the state treasurer. The Legislature
can then appropriate that sum of money in any legal way it desires.
The total sum certified and appropriated is divided into
twelve eq,ual parts. If, during any month, the actual tax and fee
collections are not equal to or more than the sum approved for
that month's expenditures, the budgets of all agencies of govern-
ment are reduced by the amount necessary to balance income with
outgo. The Constitution requires that the Governor so reduce the
budget. During the last fiscal year, the budgets were reduced in
two different months which created an economic as well as political
crisis. Bills could not be paid and, in some cases, employees
were not paid on time.
Since the Department of Human Services - Welfare depends on
the sales tax revenue the drop in sales tax collections created
a financial crisis in that department. For the first time since
the 1930's the Welfare Department requested an appropriation from
the Legislature so it could pay the salaries of employees and pay
nursing homes. To raise money to help meet the needs of the
Welfare Department, Representative Don Mentzer introduced H.B. 1325
which would~repeal the sales tax exemption now allowed on tobacco
products and beer.
Representative Fred Joiner introduced an amendment to strike
the section of the bill that affected cigarettes and tobacco
products but his amendment was defeated. The House passed the
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final version of the bill overwhelmingly - 71 ayes and 25 nays -
and it was sent to the Senate for action by that body. It was
referred to the Senate Finance Committee but no action was taken.
It is still alive in committee and can be brought up for action
at the next session in January if not before in a special session.
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1 Section I-A-2.
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Threat of Ci arette Tax Increase (1983-84)
The most threatening legislation facing the tobacco industry
in Oklahoma: as far as taxes are concerned appears to be House
Bill 1325 which would eliminate the sales tax exemption on tobacco
products and beer. The bill was introduced in the regular session
of the legislature and passed overwhelmingly by the House. It
is currently in the Senate Finance Committee and can be brought
up for action at the next session in January, 1984 if not before
in a special session.
There is talk of a special session in the fall. Under
Oklahoma law, the Governor can call a special session of the
Legislature or a vote of a two-thirds majority of each Hou e can
convene a special session. At this time, there is considerable
doubt concerning the probability of a special session. If'one is
called, however, it would be for the sole purpose of raising
revenue...in which case the tobacco industry would be on the front
line. To date the Governor has taken a strong stand against any
tax increases, but that does not mean forever. If state finances
continue to deteriorate, action will be taken by the Legislature
to increase revenues.
Currently, the only tax legislation that the tobacco industry
faces in Oklahoma is the removal of the tobacco tax exemption
from the sales tax law. Although no new increases in the actual
state excise on cigarettes is anticipated at this point that is
always a possibility. (z
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l Senate President Pro Tem Marvin York, a democrat from ~p
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Section I-A-2
Oklahoma City, recently predicted that unless there is a tax
increase, next year's Legislature will have up to $250 million
less to spend than was appropriated this year. Senator York
has previously said a special session of the Legislature should
be called to deal with the revenue problem. Governor George
Nigh, a democrat, has said a special session is unnecessary.
A number of interim legislative committees are already
meeting and wrestling with the problem of future appropriations
and the gloomy outlook for revenue projections in Oklahoma.
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