Lt Governor Mary Fallin offers ideas on tobacco tax

OKLAHOMA CITY (AP) _ Republican Lt. Gov. Mary Fallin weighed in on the tobacco tax debate Thursday, suggesting tying Gov. Brad Henry's proposal to elimination of the capital gains tax. <br><br>Fallin

Friday, March 5th 2004, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ Republican Lt. Gov. Mary Fallin weighed in on the tobacco tax debate Thursday, suggesting tying Gov. Brad Henry's proposal to elimination of the capital gains tax.

Fallin called a news conference to say she was for raising cigarette taxes, but said changes in Henry's measure needed to be made to get enough votes to pass it.

Henry is proposing a public vote on increasing the tobacco stamp tax by 77 cents to raise $130 million to provide health care for 200,000 Oklahomans, build a cancer center and improve trauma care.

The bill, which would result in a net cigarette tax increase of 52 cents per pack, faces a deadline for consideration next week in the House, where leaders say they are short of enough vote to pass it.

It is opposed by most of the GOP members, who have taken a pledge not to vote for a tax increase. Several Democrats also oppose the Henry plan.

``The tobacco tax increase and the plans to improve the health of Oklahoma is in trouble if we do not continue our discussion and explore all avenues,'' Fallin said.

Fallin's proposals differ greatly from Henry's plan. Henry is proposing to use most of the $130 million a tax would raise to extend health care coverage to Oklahomans who now are uninsured.

The lieutenant governor wants to increase current Medicaid payments to doctors and other health care providers as a way to improve access.

She also would tap tobacco settlement money for a bond program to fund the cancer center and would slash the capital gains tax over three years. She estimated that reduction at about $124 million, or $41.3 million a year.

Henry's budget proposed cutting the capital gains tax for companies headquartered in Oklahoma for five years. The cost would be $4.5 million next year and $33.3 million each year after that, according to the Office of State Finance.

The Democratic governor was not in town, but issued a statement through his press office saying he has been working with legislators of both parties to build a consensus on the best approach to resolving the health care issue.

He said his program was based on recommendations of a bipartisan group which ``was very specific about the need for new revenue to fund health care improvements.''

House Speaker Larry Adair said supporters of Henry's plan are ``getting closer'' but indicated they were still short a dozen votes or so.

Adair, D-Stilwell, said any plan would need to raise additional revenue to make it work.

Rep. Todd Hiett, House GOP leader, said a revenue-neutral plan would help the bill's cause in light of the fact that about a fourth of the House's membership, mostly Republicans, have signed a pledge not to raise taxes.

Hiett, R-Kellyville, said Fallin's plan had merit because it would lead to increased economic activity and produce more tax dollars in future years.