UPDATED: State senator expects HB 2667 to reach governor’s desk
A roulette wheel sits ready for play at the Hard Rock Hotel & Casino in this 2018 photo. House Bill 2667, authored by State Rep. Kevin Wallace, R-Wellston, would permit the exclusion of gambling losses under Oklahoma’s $17,000 cap on itemized deductions. COURTESY
OKLAHOMA CITY – Having gone through votes in the Oklahoma Senate and House of Representatives, a bill that could facilitate an uptick in casino gambling is now awaiting further action by the House.
House Bill 2667, authored by State Rep. Kevin Wallace, R-Wellston, would permit the exclusion of gambling losses under Oklahoma’s $17,000 cap on itemized deductions. The bill passed the House by a vote of 83-16, with the yeas including Cherokee County legislators Matt Meredith, D-Tahlequah; Chris Sneed, R-Muskogee; and David Hardin, R-Stilwell. State law already allows the omission charitable contributions and medical expenses when itemizing.
The measure then emerged from the Senate Finance Committee on April 2 with a unanimous recommendation of “Do Pass,” but with the enacting and emergency clauses stricken. Because the changes required a Senate vote and another House approval, likely after referral to a conference committee, observers believed HB 2667 has little chance of passing during the 2019 session, though it would remain alive in 2020.
“I think it will wind up on (Gov. Kevin Stitt’s) desk, and it will get signed during this session,” said State Sen. Dewayne Pemberton, R-Muskogee, speaking on April 26. “The House has two more weeks to pass it, and there is still time for amendments and for stuff to go to conference committee. It’s just me talking, but I think they will have it out of there within two weeks.”
HB 2667 hurdled the Senate by a 32-12 vote, but conversely, none of Cherokee County’s senators supported the bill. Republicans Kim David of Porter, Wayne Shaw of Grove, and Pemberton all voted nay.
Some criticism has been directed at HB 2667, because the Oklahoma Tax Commission projected its passage could result in a total revenue loss of $17.8 million.
Taxpayer itemized deductions were capped at $17,000 per year by HB 1011xx of 2018 – the measure that dug up revenue for the state’s teacher raises. The bill also gleaned funding from a $1 tax per pack of cigarettes, an increase in the gross production tax on new oil and gas wells from 2 to 5 percent, and an added 3-cent gasoline tax and 6-cent diesel tax per gallon.
“It was just a personal thing with me,” Pemberton said. “Last year, we discussed charitable contributions and medical expenses, and this year, they talked like we forgot about gambling expenses – that it was accidentally left out. I don’t think it was left out. As I recall, we never discussed it.”
Critics argue that HB 2667 would remove millions in funding from education.
“For me, it is a fiscal responsibility thing,” Pemberton said, explaining his “no” vote. “I’m not voting for these deductions, because we will be back next time we hit a downturn trying to get them back. Oklahoma has been bad about that for decades, really. We only bring in about half our possible taxable income and wonder why we are last in education funding. Plus, it’s gambling debts. Gambling is a sport or entertainment. If I go watch a movie, I can’t write off the ticket. When I go fishing and don’t catch any fish, where is my bait exemption? I know the federal government allows it, and that was part of (the proponents’) argument, but writing off gambling losses rubs me the wrong way. But my vote didn’t matter. It will pass, and I figure the governor will sign it.”
Kim Teehee, Cherokee Nation Businesses government relations vice president and Cherokee Nation government relations director, said the bill was a “priority” for the CN.
“House Bill 1011xx was passed during a special legislative session last year, but one of the unintended consequences of that bill was putting at risk more than a thousand jobs and millions of dollars meant for education under the tribal gaming compacts. Oklahoma is the only state to cap deductions on gaming losses. That cap may also force some casino patrons to pay state income tax on money not earned. While the Oklahoma Tax Commission estimates an annual revenue reduction of $8.9 million from HB2667, it doesn’t take into consideration approximately $20 million in education funding that could be lost statewide from out-of-state casino patrons who choose to game in income tax friendlier states. That is revenue our state and our schools cannot afford to lose as more neighboring states expand gaming.”
Another bill of particular interest to Oklahoma’s tribes was signed into law by Stitt on April 15.
HB 1074 added language concerning regulation of the placement of children by the Oklahoma Department of Human Services. The added clause reads: “The Department shall verify applicability of the Indian Child Welfare Act within three months of the child being taken into custody.”
The law already states,“ In cases where the Indian Child Welfare Act applies, the placement preferences of the act shall be followed.”
The measure passed both statehouse chambers without dissent.