Oklahoma Gov. Fallin's tax-cut proposal passed by Senate
BY BARBARA HOBEROCK World Capitol Bureau
Thursday, April 26, 2012
4/26/12 at 7:59 AM
OKLAHOMA CITY - The Oklahoma Senate on Wednesday passed Gov. Mary Fallin's tax-cut proposal.
The measure is expected to wind up in a conference committee with several other tax-cut proposals.
House Bill 3061 would reduce Oklahoma's current tax structure to three brackets from seven.
Under the measure, individuals earning less than $15,000 a year and couples earning $30,000 or less would pay no state income tax.
Individuals earning at least $15,000 but less than $35,000 and couples earning at least $30,000 but less than $70,000 would pay 2.25 percent on all income.
Individuals earning more than $35,000 and couples earning more than $70,000 would pay 3.5 percent on all income.
Oklahoma's current top income tax rate is 5.25 percent.
The measure would eliminate many tax credits and exemptions, according to Fallin's office.
It would also provide for the eventual elimination of the state income tax, with additional yearly reduction of .25 percent to the tax rate linked to a 5 percent growth in state tax revenue collections, according to Fallin's office.
Sen. Mike Mazzei, R-Tulsa, said the House amended the legislation to keep in place the current exemptions for retirement income, social security income and military pay.
Those changes increased the cost of the proposal, Mazzei said.
The current proposal would cost nearly $383 million in fiscal year 2013, up from $113 million in the original plan, Mazzei said.
For fiscal year 2014, the impact would be slightly more than $980 million, up from $300 million, Mazzei said.
The Senate on Wednesday amended the measure to keep in place Oklahoma's exemption for tax-free interest on municipal bonds and state bonds, Mazzei said.
"I am grateful to the Senate for passing the Oklahoma Tax Reduction and Simplification Act, as well as their continued focus on tax relief and reform," Fallin said. "This is one of several tax cut bills that has now passed in both the House and Senate, and it is clear that a majority of legislators are committed to responsibly reducing the income tax burden in Oklahoma."
Fallin said her office will push for the largest tax cut possible, along with a reduction in outdated tax credits and an overall simplification of the tax code.
"There seems to be an irrational political pressure to further erode Oklahoma's tax base when we have no way to even begin to address all of the needs and obligations we're currently facing," said Senate Minority Leader Sean Burrage, D-Claremore. "Reality doesn't seem to figure into this discussion at all."
The measure passed by a vote of 30-16.
Original Print Headline: State Senate approves Fallin's tax-cut proposal
Barbara Hoberock 405-528-2465
Gov. Mary Fallin: "I am grateful to the Senate for passing the Oklahoma Tax Reduction and Simplification Act, as well as their continued focus on tax relief and reform," she said