The Joplin Globe, Joplin, MO

Local News

May 17, 2012

Talks heat up on plans to slash Okla. income tax

OKLAHOMA CITY — Talks heated up at the state Capitol on Thursday over plans to cut the state income tax, but leaders in the Republican-controlled Legislature and Gov. Mary Fallin still have not reached a deal on how a tax cut would work.

Fallin and House GOP leaders were expected to unveil their joint plan to reduce the income tax, but that announcement was scuttled after Fallin met privately with the House Republican caucus.

Senate Republicans earlier this week announced their plan to slash the income tax by one-half of 1 percent over the next two years, dropping the top rate from 5.25 percent to 5 percent in 2013, and to 4.75 percent in 2014. But the Senate wants to pay for the tax cut by eliminating tens of millions of dollars in tax exemptions for businesses and individuals, an idea that has gained little traction in the House.

“We’re still working,” Fallin said Wednesday after emerging from a closed-door meeting with House GOP leaders. “Discussions are ongoing.”

She said she expects an agreement to be reached before the end of the week. Lawmakers still must craft and pass a state budget by May 25 or be forced to return for a special session. The idea of a special session is bitterly opposed by lawmakers, many of whom face primary elections next month.

Senate President Pro Tem Brian Bingman said he believes lawmakers need to reach an agreement by Friday in order to avoid a special session.

“We’re still talking. That’s a good thing,” Bingman said Thursday afternoon. “We’re not that far apart.”

Fallin also has endorsed the idea of revenue triggers to further reduce the income tax in future years when revenue growth meets a certain threshold, but the Senate has rejected that idea.

House leaders have said they want to reduce the top income tax rate to 4.95 percent next year, but they want to pay for the reduction in growth revenue. Figures released this week by the Office of State Finance show total collections through April topped $4.6 billion, which exceeded the official estimate by more than $350 million, leaving state officials with a surplus that could be used to pay for a tax cut. A reduction to 4.95 percent is expected to cost the state about $140 million when fully implemented.


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