Law & Principles

Jay Chilton | August 9, 2017

Oklahoma Supreme Court hears arguments over authority of SQ 640

Jay Chilton

OKLAHOMA CITY―Eight Oklahoma Supreme Court Justices sat before more than 100 legislators, reporters, lawyers, and concerned citizens on Tuesday, with hundreds more in the state Capitol watching a broadcast of the proceedings. In the courtroom, the Justices listened to attorneys argue about whether State Question 640 applies to several revenue-raising measures passed in the final days of the 2017 legislative session. Justice Joseph Watt was absent for the duration of the morning’s proceedings.

State Question 640 was passed by a vote of the people with a 12-point margin in 1992. It amended the Oklahoma Constitution so that “bills for raising revenue” are required to be voted upon by the people at the next general election. As a second option, it allows the legislature avoid a vote of the people if 75 percent of both the House and Senate vote in favor of a revenue bill. It also requires that no revenue bills be passed during the final five days of the legislative session.

The first issue before the court was a bill that removed a sales tax exemption on the sale of new cars.

“Before the court today is whether creative lawyering can circumvent the amendment passed by the people in 1992,” Clyde Muchmore, attorney for the Oklahoma Automobile Dealers Association, said in his opening statement.

“Do you believe that the people limited the ability of the legislature to remove (tax) exemptions with Article 5, Section 33 (the amendment to the Oklahoma Constitution created by SQ 640)?” Justice Patrick Wyrick asked.

“Whatever you call it,” Muchmore responded, “they limited the ability to put into effect a raise in taxes that was not there before.”

The second hearing of the morning considered a measure that will increase the cost of a pack of cigarettes by $1.50. The measure was considered a tax increase throughout legislative session until, in the final days, it was reintroduced as a fee.

“When the bill failed to pass with 75 percent of the vote,” Robert McCampbell said, speaking for the challengers, “the legislature repackaged it inside an appropriation bill and passed it … literally in the eleventh hour of the last day, which violates the five-day requirement.”

The measure was House Bill 1841 by Rep. Leslie Osborn, R-Mustang. Osborn would later admit in a June 27 town hall meeting in Tulsa that the passage of her bill was improper. “When you have to have 76 votes, because of State Question 640, to raise revenue, how do you get it? … We had to get ‘creative,’ she said, making air-quotes with her fingers. “We had to run a cigarette ‘fee’ and make it more about healthcare policy.

“Did we get creative and fund in a way we shouldn’t have? Probably. But at the end of the day, nobody would come together and do the 75 percent necessary (for proper passage).”

In the courtroom, Justice Wyrick asked Solicitor General Mithun Mansinghani, who was arguing for the state, “How is this not a ‘sin tax?’”

“This is the most effective way of reducing smoking,” Mansinghani responded. “That is why they passed this bill.

“Wouldn’t the most effective way to reduce smoking rates be to ban it?” Wyrick asked.

“Yes, of course,” Mansinghani said. “Banning it would be the most effective … but short of banning this is the most effective way to reduce incidences of smoking.”

In response, Wyrick suggested that the state’s position meant the legislature could identify any behavior they think is bad, apply a fee to discourage it, and thus sidestep constitutional limits imposed by State Question 640.

Several other justices expressed doubt that the fee was anything more than a disguised revenue bill, including Justice James Edmondson who expressed concern that the cigarette bill says little about how the revenue it creates would be spent.

“The specificity seems to be lacking in this,” he said, “and it does therefore take on every appearance of being a revenue-raising bill for government.”

“Without this bill,” Mansinghani said, “18,000 Oklahomans will die prematurely from smoking. That doesn’t sound like a revenue bill. … For this reason, we ask the Court to deny the petition.”

Justice Tom Colbert recused himself from the final argument of the morning, which challengers attempted to focus on the original intent of State Question 640.

“The true intent was to subject any revenue-raising measure to a higher standard, it should be required to meet the supermajority of three-fourths of the legislature,” Stan Ward said in his opening remarks, representing gubernatorial candidate Gary Richardson. “If you’re going to raise revenue, it must be raised in strict adherence to Article 5, Section 33.”

He asserted that the further intent of the state question was to give final say to what he called the “super-legislature,” the people of Oklahoma, in the form of a state question which would require a simple majority of the citizens of the state.

Ward acknowledged the difficulties faced by the 2017 legislature in the final days before the last gavel. “But exigent circumstances do not justify a violation of the constitution,” he said.

“The public deserves clarity … The people hoped to control expenditures by the legislature by limiting their ability to levy revenue raising measures,” Ward said in closing. “But we have seen multiple challenges to this section through parsed bills such as these.”

The Court stood in recess at 11:42 a.m.

Jay Chilton

Independent Journalist

Jay Chilton is a multiple-award-winning photojournalist including the Oklahoma Press Association’s Photo of the Year in 2013. His previous service as an intelligence operative for the U.S. Army, retail and commercial sales director, oil-field operator and entrepreneur in three different countries on two continents and across the U.S. lends a wide experience and context helping him produce well-rounded and complete stories. Jay’s passion is telling stories. He strives to place the reader in the seat, at the event, or on the sideline allowing the reader to experience an event through his reporting. He earned a Bachelor of Arts degree in journalism from the University of Central Oklahoma with a minor in photographic arts. Jay and his wife live in Midwest City with three dogs and innumerable koi enjoying frequent visits from their children.

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