Legislative leaders, Gov. Fallin say income tax cut, workers’ comp reform likely

OKLAHOMA CITY — Both a major change in state workers’ compensation insurance provisions and a moderate income tax reduction and are within reach at the Oklahoma Capitol, top lawmakers say.

The items are key elements in the oft-stated conservative Republican agenda for the 2013 Legislature, which has seemed to be on shaky ground in recent weeks. With the clock ticking for the final weeks of this year’s deliberations, House Speaker T.W. Shannan, R-Lawton, and Senate President Pro Temp Brian Bingman, R-Sapulpa, told Capitol reporters they are “close” to agreements on the “big ticket” items. 

The two men also said, in a review of legislative progress, that Speaker Shannon’s proposal to make infrastructure improvements on a “pay-as-you-go” basis will also make it into law.

Gov. Mary Fallin says her bottom line is she wants a tax cut on her desk this year, whether the effective date is Jan. 2015 or sooner. Thus, the real question seems to be how quickly a new income tax cut might take effect. 

Rep. Shannon reiterated his insistence that any delay before July 1, 2013, in the effective date of a lower income levy means it should be deeper than the .30 percent reduction proposed by the Senate. Shannon is determined, he says, to get the top rate from its current 5.25 percent to as far under 5 percent as possible. 

Sen. Bingman, with a slight grin on his face during his briefing, told reporters he expects agreement on final language for House Bill 2032 “by next Thursday” – that is, April 25 — the date by which the next round of procedural steps for this year’s enactments is absolutely required. 

Pressed for elaboration, he explained, “I’m not going to announce there is common ground on anything; until we have consensus I’m reluctant to start talking about the details.” 

The Senate has made some important changes in H.B. 2032, the income tax vehicle, eliminating certain transferable tax credits and delaying the effective date of the legislation.

Casting a pall over the prevailing sense of optimism among the “Big Three” (the governor, president pro temp and speaker) is the “epic fail” of 2012, when an income tax cut package fell apart in the last few days of the session. 

Perhaps with that in mind, Gov. Fallin’s spokesman, Alex Weintz, told reporters a few days ago, “The governor and her team want a tax cut this year. Her preference, and she said it in the state of the state speech, is for 1/4th percent right now. She wants something now. Her priority is she is asking for the Legislature to get a tax cut bill to her desk this year.”

Shannon endorsed supply-side orthodoxy in a recent interview, saying, “If we cut taxes it will grow revenue. If we delay and don’t implement this year – not saying I want a delay – then I think there should be a deeper tax cut.”

Bingman, in another discussion of the issue, summarized his perspective: “I have a good relationship with the governor and with the speaker and we’re headed in the same direction. I want to be responsible in what we do. I’d like to look some at tax credits and tax reform.”

Turning to a proposed shift away from the state’s present litigation-centered system of workers’ compensation, Speaker Shannon said, “It’s hard work because we’re going to a whole new system. My bottom line is reducing the premiums our businesses have to pay, and going to an administrative system. I anticipate the bill will be considered in the calendar committee on Monday (April 22).” 

When one reporter asked Bingman if he was concerned over House “tinkering” with his original Senate version of workers’ compensation reform, the Senate leader commented, “That is part of the process. It think at the end of the day what we’ll have will be good for business, a win-win for Oklahoma.”

One envisioned change in workers comp is to allow what the two legislative leaders call “The Oklahoma Option.” Critics decry that as an “opt-out” provision to benefit only large business concerns.

Bingman disagreed with that characterization, telling reporters, “It’s the Oklahoma Option, giving options to businesses in Oklahoma. Even under alternative forms of coverage, they would still have to have benefits [for injured workers] that are now in state law.”

Among other matters debated this week, the Senate extended the so-called SHOPP, the Supplemental Hospital Offset Payment Program fee, one method for funding for the state’s health care system. The hospital provider “assessment” or fee (some still deem it a tax) first passed in the 2011 session. 

In this week’s meeting with the press corps, Bingman disagreed with critics who have characterized the SHOPP as a Medicaid expansion that is “hypocritical.” He commented, “It extended current state law, the current statute. That is not hypocritical.” 

You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok