- Associated Press - Tuesday, May 17, 2016

OKLAHOMA CITY (AP) - In a story May 17 about a proposed cigarette tax increase, The Associated Press reported erroneously that the proposal would reduce planned cuts to Oklahoma’s Medicare reimbursement rates. It would reduce planned cuts to the state’s Medicaid reimbursement rates.

A corrected version of the story is below:

House unveils tax plan to pay for Oklahoma teacher raises

A proposal to ask voters to approve a slight increase in the state sales tax and expand it to include services to pay for a teacher pay raise of up to $10,000 was unveiled Tuesday by leaders in the Oklahoma House

By DANIEL C. HOUSTON and TIM TALLEY

Associated Press

OKLAHOMA CITY (AP) - Some teachers would get a salary increase of up to $10,000 under a proposal Oklahoma lawmakers proposed Tuesday that asks voters to approve a slight increase in the state sales tax and expand it to include certain services.

The measure was among several revenue-raising bills considered by joint House and Senate appropriations committees in an attempt to help close a projected $1.3 billion hole in next year’s state budget.

House and Senate committees approved a measure to increase cigarette taxes by $1.50 per pack that would raise about $190 million a year to stave off some of the deepest proposed cuts to Medicaid reimbursement rates.

But a House appropriations panel defeated a measure to increase fuel taxes in the state to help pay for road and bridge construction, and a Senate committee rejected a proposal to increase taxes on low-point beer.

The House teacher pay raise measure was described as “a work in progress” by Liz McNeil, spokeswoman for Republican House Speaker Jeff Hickman. GOP Rep. Earl Sears, chairman of the House Joint Committee on Appropriations and Budget, said it had not been scheduled for a hearing.

The proposal would increase the sales tax from 4.5 percent to 4.9 percent and expand it to include repair, installation, delivery and maintenance services, laundry and dry cleaning, automobile repair services, satellite and cable TV, computer software delivered electronically, dry cleaning, pet grooming and a number of other services.

Legislative fiscal analysts have not released estimates of how much revenue the sales tax measure would raise. But it would pay for $5,000 raises for teachers with up to five years of service, $7,500 raises for teachers with 6-10 years and $10,000 for teachers with 11 or more years.

According to the National Education Association, Oklahoma ranked at the bottom among U.S. states and the District of Columbia for education spending in the 2013-2014 school year and was 48th in teacher pay.

If ultimately approved by lawmakers, the proposal would go before voters in November. An initiative petition calling for a statewide vote on a separate 1-cent sales tax for education is currently under review by the Oklahoma Supreme Court to determine whether there are enough valid signatures to put the question on the ballot.

That plan, supported by University of Oklahoma President David Boren, would generate about $615 million annually with about 70 percent designated for a $5,000 pay raise for Oklahoma teachers.

House and Senate committees approved the cigarette tax increase, which, if implemented, is expected to relieve $158 million of potential Medicaid rate cuts in next year’s budget.

Some lawmakers expressed regret that the cigarette measure could disproportionately affect poorer Oklahomans.

Republican Sen. Clark Jolley said the cigarette bill was an important component of raising revenues for the new budget and would have to pass quickly through the Legislature. He said he hoped the tax would pull in declining revenues in the future as more Oklahomans are encouraged by higher prices to quit smoking.

The House Joint Committee on Appropriations and Budget voted 14-9 against a proposal to raise Oklahoma’s fuel taxes by 3 cents a gallon to 20 cents for gasoline and 17 cents for diesel. Opponents said Oklahoma voters soundly defeated a proposed fuel tax increase in 2005.

A Senate committee also defeated a measure that would quadruple the excise tax rate on low-point beer to $45 per barrel and apportion part of the proceeds to the state’s general revenue fund.


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