Nov. 7 (UPI) -- After a downgrade on its credit rating, Oklahoma's governor urged House leaders to move quickly to pass a measure meant to close a looming budget gap.
House leaders in Oklahoma said last week they were leading the way in working in bipartisan fashion to address lingering budget strains. Though rich in oil and gas, the state's governor said looming pressures were addressed with only short-term solutions.
"I have warned lawmakers for the past three years that we need to address our budget's structural deficits instead of continuing to kick the can down the road by depleting available cash and using one-time funds," Gov. Mary Fallin said in a statement.
Oklahoma is one of the most significant producers of crude oil in the United States, accounting for about 4 percent of the nation's total. It hosts some of the largest deposits of shale oil and gas in the country and the trading hub in Cushing is considered the most significant entity of its kind in North America.
Shale states like Oklahoma faced economic hardships last year because the low price of oil made it expensive to work in the cost-intensive basins in the state. Fallin in December said a decision by members of the Organization of Petroleum Exporting Countries to limit production was welcome news for her state.
The OPEC move, which could last into 2018, helped support higher crude oil prices. West Texas Intermediate, the U.S. benchmark for the price of oil, hit its highest level in more than two years in Monday trading and is up nearly 10 percent since the start of the year.
Still, Moody's Investors Service said Monday it issued a "credit-negative" rating to Oklahoma because of its inability to find lasting budget solutions. After six weeks in special session, the state Senate moved in favor of a budget measure, but the governor said "we will still have a budget hole" next year.
The bill, which now heads back to the state House, would double the tax rate on oil and gas production at new wells, impose higher motor fuel taxes and introduce a new sin tax on cigarettes.
Taxes on oil and gas production generated $52 million in October, a jump of 48.4 percent from last year. Compared with September, however, tax collections from oil and gas grew just 3.7 percent.