Capitol Beat OK

Governor Fallin still wants “significant” tax cut, Steele seconds the motion, Democrats demur

On Monday (April 30), Oklahoma Governor Mary Fallin strongly restated her support for what she termed “significant income tax reduction” this year. 

Last week in a meeting with reporters and again in a commentary for The Oklahoman on Sunday (April 29), Speaker of the House Kris Steele appeared to agree with the state’s chief executive – although he remained reluctant to name a percentage reduction he thinks is most likely. 

In a statement sent to CapitolBeatOK and other news organizations, Fallin said: “Oklahoma families need and deserve a significant income tax reduction. Cutting taxes will not only allow our citizens to keep more of their hard earned money, it will also make Oklahoma a more competitive state to do business in and will help to create more and better jobs.

“Pursuing income tax cuts and tax simplification continue to be a priority of mine as I work with lawmakers to enact policies that will help to grow Oklahoma’s economy.

“Earlier this year, I proposed the ‘Oklahoma Tax Reduction and Simplification Act,’ a bold plan to dramatically cut taxes, reduce the total number of tax brackets from seven to three, and set the stage for the gradual elimination of the income tax. 

“That plan is one of several tax-cut plans proposed this year and still being considered by the Legislature. While I do not expect my plan to be rubber-stamped by legislators, I do expect them to continue to pursue the kind of tax reduction and simplification that we have been working on all legislative session.
“Moving forward, I continue to be committed to a significant tax cut for as many Oklahomans as possible. I continue to support and advocate for a simplification of the tax code that includes both the elimination of underperforming tax credits and an overall reduction in the total number of tax brackets. Finally, I will continue to fight for a plan that includes multiple year reductions in the income tax, where cuts are tied to revenue growth triggers.” 
In his Sunday commentary, Steele chided “tax consumers and other tax-reduction opponents who’ve falsely cast the current income tax reduction discussion as some sort of reckless Republican crusade.” 

He said opposition to reform of tax credits and some incentive programs led Republicans to scale back hopes for a large income tax cut, but he predicted “the personal income tax will continue decreasing in the same gradual manner it has for nearly 15 years.”

In his weekly interaction with members of the Capitol press corps, Speaker Steele observed two legislative vehicles remain alive, including state Rep. Leslie Osborn’s bill (House Bill 3038) to put the state on a glide path of elimination of the unpopular levy. 

Steele said Governor Fallin’s preferred bill, House Bill 3061, which he has co-sponsored with Senate President Pro Tem Brian Bingman, is likely to be the repository for the final tax reduction measure, now in negotiation.

Steele used words like “major” and “significant” to describe what he thinks will emerge from negotiations, but he laughed and would not affirm suggestions that a reduction of “as much as 1.7 percent” could emerge. 

Meanwhile, House Democrats remain strongly opposed to talk of an income tax phase out and/or major reductions.

House Minority Leader Scott Inman of Del City contends “Elimination or reduction of the state income tax will necessitate increased sales and property taxes, just as has been done in the state of Texas.  This will hurt those who can least afford it.”

Along with Inman, state Rep. James Lockhart of Heavener has asserted an income tax phase out would lead to higher taxes on sales and property. He also said in a Thursday press conference that Oklahoma would follow the path of Texas (where there is no income tax) toward deficit spending. 

Rep. Mike Brown of Tahlequah also opposes a cut, maintaining lower income taxes would benefit only upper income Oklahomans.