To Comfort The Afflicted
And Afflict The Comfortable

To Comfort The Afflicted And Afflict The Comfortable

Thursday, January 20, 2022


Let’s Really Fix This



An open letter to ALL Oklahomans:

Today is Friday, Oct. 27, 2017. Before you start sharing your opinions about Oklahoma’s budget crisis and knocking on the Democrats or the Republicans, please take a deep breath and read all eight points below:

First, the Oklahoma Energy Producers Alliance sponsored a poll showing that 67% of Oklahomans favored an increase in the gross production tax [GPT] to 7%.

Second, the current Oklahoma GPT rate is 2% for the first three years [“tax holiday”] of each well’s production and then it increases to 7% in the 37th month of the life of the well.

Third, Oklahoma’s GPT Tax Rate is not only the lowest in the country, if it is raised to 4%, it will still be the lowest in the country.

Fourth, the length of the “tax holiday” is every bit as important as the percentage rate. For instance, horizontal wells in Oklahoma are more than half depleted after just 36 months of production. So, when Democrats said months ago that they would accept 4% at 12 months; 4.5% at 18 months or 5% at 36 months, the length of the “tax holidays” were not just numbers that were casually tossed around.

Fifth, it is not surprising that oil companies would agree to let politicians who they have given hundreds of thousands of dollars to vote for a 4% rate if the “tax holiday” is long enough.

• A 12-month tax holiday means that 37% of the lifetime oil production of the well is depleted before the 7% rate kicks in.

• A 24-month tax holiday means that 53% of the lifetime oil production of the well is depleted before the 7% rate starts.

• A 36-month tax holiday means that 62% of the wells total oil production is depleted before 7% applies.

Sixth, even though the Democrats have been requesting an increase in gross production tax for months, it has only been 72 hours since the Republicans reached a budget deal with each other … and that budget deal didn’t include the gross production tax … or Democrats.

Seventh, it has only been nine hours since the Republicans offered the state of Oklahoma this deal: the lowest gross production rate in the country so oil companies could pocket the money from the sale of 62% of each well’s lifetime production of oil before the tax went to 7%.

Eighth, most legislators [Republican and Democratic] want to fix this, but those who are beholden to their campaign contributors are having a tough time right now. This is not for the timid.

If you have the indecision of a squirrel trying to cross the road, pick up a good book and read a while with the TV off and your curtains pulled. If you really want this fixed, pick up the phone or sit down and write a note to your legislator, Democratic or Republican, and encourage them to really fix this by increasing the gross production tax and decreasing the length of the tax holiday.

David Perryman, a Chickasha Democrat, represents District 56 in the Oklahoma House

David Perryman
David Perryman has deep roots in Oklahoma and District 56. His great-grandparents settled in western Caddo County in 1902 as they saw Oklahoma as a place of opportunity for themselves and for their children. David graduated from Kinta High School then earned degrees from Eastern Oklahoma State College, Oklahoma State University, and the University of Oklahoma College of Law where he earned his Juris Doctorate. He has been a partner in a local law firm since 1987 and has represented corporations, small businesses, medical facilities, rural water districts, cities, towns, public trusts authorities and non-profit entities for more than 29 years. – David Perryman, a Chickasha Democrat, represents District 56 in the Oklahoma House