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Oklahoma Education Needs Vibrant Oil, Natural Gas Sector

Mike McDonald
NewsOK
October 11, 2010

Approval of State Question 744 would be a debilitating blow to businesses and industry in Oklahoma. 

With no dedicated funding mechanism to support an increase in education spending, state leaders would be forced to increase taxes and fees on businesses and industry working in Oklahoma in order to meet the estimated $1 billion in new spending needed to reach the regional average for common education funding. Doing so would hamper our state's ability to grow existing business and recruit new companies and more jobs to our state.

At risk are long-standing tax provisions for the oil and natural gas industries that are designed to encourage investment in our state's vibrant oil and natural gas fields. Losing those provisions, which are similar to tax provisions in place in neighboring states, would send Oklahoma drilling rigs and the jobs that support them into Texas, New Mexico, Colorado and Kansas — the same states SQ 744 wants to base our education spending on.

Since 2005, Oklahoma oil and natural gas producers have paid more than $6 billion in gross production taxes, the 7 percent tax on each barrel of oil and each thousand cubic feet of natural gas drawn from the earth. When gross production tax is combined with income taxes, motor vehicle taxes, ad valorem taxes and other miscellaneous taxes and fees, Oklahoma's oil and natural gas industries account for approximately 25 percent of all taxes paid in the state. That money, one out of every four dollars spent by our state government, is used to support education, build roads and provide health care.

Of the 25 largest charitable foundations in Oklahoma, 16 of them, including the three largest and 10 of the 15 largest, were founded by individuals involved in the oil and natural gas industries, and schools are one of the largest benefactors of those foundations' assets. The Oklahoma Energy Resources Board, funded by voluntary contributions from oil and natural gas producers and royalty owners, provides free training, materials, educational trips and in-class presentations for hundreds of Oklahoma teachers each year.

Oil and natural gas producers in this state have been long-standing supporters of education. Oklahoma's education system will not thrive without the help of healthy and vibrant oil and natural gas industries.

McDonald is chairman of the Oklahoma Independent Petroleum Association and co-owner of Oklahoma City's Triad Energy Inc.

When gross production tax is combined with income taxes, motor vehicle taxes, ad valorem taxes and other miscellaneous taxes and fees, Oklahoma's oil and natural gas industries account for approximately 25 percent of all taxes paid in the state.