- The Washington Times - Tuesday, February 18, 2003

OKLAHOMA CITY, Feb. 18 (UPI) — An Oklahoma Senate leader says a tax increase will be necessary to make up for a near $700 million budget gap in the upcoming fiscal year

Senate President Cal Hobson, D-Lexington, proposed increases in sales and cigarette taxes at a rally of about 300 state workers protesting the plight of state services at a mock funeral Monday.

Hobson said a temporary 1-cent sales tax for education would produce $320 million a year. He also proposed an increase in the cigarette tax from 23 to 39 cents per pack, according to the Daily Oklahoman.

"We cannot get out of this problem without hurting people unless we raise taxes," he said.

Oklahoma is one of 24 states considering tax increases because of revenue shortfalls in the upcoming fiscal year, according to the National Conference of State Legislatures. This comes on top of expected spending cuts in most states.

At least 14 states are considering higher cigarette taxes and six others are looking at a sales tax increase or an expanstion of the sale tax base.

Democrat Gov. Brad Henry told the Oklahoma workers that the state government is facing a $678 million revenue shortfall in the coming fiscal year.

"We're all going to have to tighten our belt … it has to be done in state agencies," he said.

Henry has proposed increased fees, refinancing bond debt and consolidation of government agencies to pay for increases in education and health care spending. His proposed fiscal 2004 budget totals $5.12 billion.

Gary Jones, executive director of the Oklahoma Public Employees Association, said the budget crisis is twice as large as during the oil bust in the 1980s. He said the average state worker didn't receive enough pay in the 1990s to keep up with inflation.

"There are those who say 'cut the fat and administration and you'll solve the problem.' Folks, it ain't there," he told the workers.

The association, which sponsored the rally, has proposed raising motor fuel, alcohol and tobacco taxes and eliminating some sales tax exemptions.

Other legislative leaders said they are going to have to look at creative ways of generating more revenue. Sen. Jim Dunlap, R-Bartlesville, suggested one way might be increasing certain fees.

More than 35,000 people work for the state of Oklahoma and about 10,000 of them are members of the OPEA.

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