Sen. Wilson Files Legislation Allowing Gov. to Buy Out Tobacco Tax Compacts

State Sen. Jim Wilson has filed legislation to allow Gov. Brad Henry to buy out tribal tobacco tax compacts that have given some smoke shops an unfair advantage over others.

Many smoke shops have been able to sell cigarettes using a 6-cent tax stamp, which is 80-cents less than the amount paid by most shops operating under new compacts. Some recent news reports have also alleged some tribes that are supposed to be using the higher tax stamp have illegally used the 6-cent per pack stamp. Either way, Sen. Wilson said the health of Oklahoma’s citizens suffers for it.

“The bottom line is we’ve got reports showing the state is collecting about $2 million less a month from tobacco taxes than what had been projected. That $2 million would fund health insurance for as many as 20,000 working Oklahomans who currently don’t have health insurance. We’re talking about funding for pre-natal care, cancer treatment and many other maladies that could literally save lives in Oklahoma,” said Wilson, D-Tahlequah. “The tribes are also losing a significant amount of revenue which would be used for health care. My legislation would give the state and the tribes a way to address this problem and benefit all our citizens by choosing health care over tobacco sales.”

Under SB 1027, the Governor would be authorized to enter into financial agreements with the tribes which have entered into tobacco tax compacts with the state to provide for termination of such compacts. The bill would allow the Governor to determine the amount of the buy-out based on the amount of the benefit the Governor determines will accrue to the state by virtue of the termination of the compact. By accelerating the expiration of the old compacts, the Governor could then enter into current compacts which would be mutually beneficial to both the State and the tribes.

“With this legislation we have an opportunity to make the administration of the tobacco compact mutually beneficial, more workable and it will help fund the kind of health care programs the voters asked for when they approved the tobacco tax state question last year,” Wilson said.