Supreme Court Strikes Down Electric Vehicle Fee

Senator Bergstrom issues statement on Supreme Court’s ruling on electric, hybrid vehicle tax

On Tuesday, the Oklahoma Supreme Court struck down, in a 6-3 decision, a fee that would have been charged to drivers of electric and hybrid vehicles, declaring it an unconstitutional tax.

Senator Micheal Bergstrom, R-Adair, agrees with the court’s decision.

“The Oklahoma Supreme Court made the right decision here,” said Bergstrom, “but it will cut this year's revenue by about another $400,000, which probably means more cuts in the budget.”

Bergstrom argues that since the legislation was clearly intended to replace revenue with the $100 fee on electric vehicles and $30 on hybrids, it should have required the same 75 percent support in both the House of Representatives and the Senate as required by the state constitution (as amended by the voters in 1992 with State Question 640) for tax increases.

“Those who drive electric vehicles on Oklahoma roads should help pay to maintain those roads, but they don’t since they do not pay fuel taxes like everyone else,” Bergstrom said. “However, this bill should have been passed as a tax and not as a fee.”

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More To Governing Than Just Raising Taxes

Capitol Considerations 

by Senator Micheal Bergstrom

           

       There is more to governing than just raising taxes.

Now don't misunderstand me, Oklahoma has to pay its bills, but just opening the tax spigot is not the answer.

Recent press reports revealed that Governor Fallin presented the state's legislators her grand bargain, a package of more than $560 million in new taxes so the state can pay its bills.  It is neither grand nor a bargain. It also does not align with her stated goals in her call of the legislature into special session.

(The special session was recessed after three days and, hopefully, will only be returning when there is a realistic proposal for legislators to vote on, which means the cost to taxpayers is also on hold.)

In the governor's call, she wanted to address "the immediate budget shortfall created by the loss of the $215 million cigarette fee revenue" due to a state supreme court decision overturning the fee. She called for long-term solutions for future budget shortfalls, "consolidation and other efficiencies in all areas of state government," a revision of the 1.25 percent sales tax on commercial vehicles, and a teacher pay raise.

All excellent objectives. So how did the grand bargain address those matters?

Her plan called for taxing all forms of tobacco at higher rates, increasing the initial gross production tax (GPT) on new wells from 2 percent to 5 percent, raising the income tax rate on those earning $250,000 or more, raising motor fuel taxes six cents a gallon, taxing a variety of "luxury services," and eliminating the wind manufacturer tax exemption.

Almost all of these taxes require a 75 percent vote in both houses to pass.

And by the way, for those who see raising the GPT as the salvation for our budget, raising it to 5 percent adds just over $21 million to the state's coffers and taking it all the way to 7 percent would only yield about $35 million. It is not the panacea many are claiming it to be.

Still, it would seem that the governor's long-term solution for future budget shortfalls is to raise taxes. The only efficiency in her plan is a down the road forced consolidation of the administrations of smaller schools throughout the state.

Where are the "efficiencies in all areas of state government"?

Yes, we need to pay our bills, but this plan is not the solution.

       I welcome your questions and concerns, so please feel free to contact my office at the State Capitol if you would like to discuss a particular issue or problem.  Our office can be reached by phone at 405-521-5561 or by email at bergstrom@oksenate.gov.   If you visit the Capitol, we are located in Room 527A.

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