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 |  | | << Back to Wellhead | | Benge bill eases impact of energy prices March 2010 | |
| Oklahoma House Speaker Chris Benge’s plan to ease the impact of volatile energy prices on state oil and natural gas taxes and stabilize the state budgeting process was overwhelmingly approved by the Oklahoma House.
Benge, R-Tulsa, told House members that the fund will help ease the financial fallout from low oil and natural gas prices. Lawmakers are expected to have about $1.2 billion less to spend next year than they appropriated last year, due mostly to a sluggish economy and low energy prices.
“We’re trying to find a way to smooth out our gross production collections,” Benge told the Associated Press. He said volatile energy prices makes it difficult to project revenue to pay for state services.
House members voted 86-4 for the measure and sent it to the Senate, where it is expected to pass.
“This is a simple concept: we would capture gross production revenues in high collection years for use in diminished collection years,” said Benge, R-Tulsa. “The current energy pricing environment set the state up for a really tough downfall, which is what we are experiencing now. I think that climate is likely to get even more volatile in the future because of the global competition for resources. This fund would take out the uncertainty in our budget planning as it relates to gross production revenues.”
Under the plan, any gross production tax collections above a three-year average are automatically deposited into the fund. In years when gross production taxes fall below the average, the fund will deposit the difference into the state’s general revenue fund to help mitigate budget shortfalls.
The plan is similar to the state’s constitutional Rainy Day reserve fund, which captures up to 10 percent of general revenue funds collected in excess of the annual estimate certified by the Board of Equalization.
Lawmakers have voted to tap about $450 million from the Rainy Day Fund, about half of which will be used to fill holes in the budget year that ends June 30.
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