Fallin's tax cut plan will not be approved as proposed
BY BARBARA HOBEROCK World Capitol Bureau
Tuesday, May 01, 2012
5/01/12 at 7:26 AM
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OKLAHOMA CITY - Gov. Mary Fallin's office Monday said her plan to cut the top income tax rate to 3.5 percent from 5.25 percent will not be passed.
"There doesn't seem to be the appetite in the state Legislature to make a huge, significant cut in the income tax," Fallin said. "I am still pushing to get an income tax reduction that will be meaningful, that will help the people of Oklahoma and that will help our small business owners."
The governor's expectations are different today than they were a few months ago, said Alex Weintz, a Fallin spokesman.
"Through our talks with the Legislature, we know that we are not going to get the governor's plan as proposed signed into law but we are still trying to get some tax reform," Weintz said.
Fallin's plan is contained in House Bill 3061. It calls for reducing the state's tax brackets to three from seven.
It would also provide for the eventual elimination of the state income tax, with yearly reductions of .25 percent to the tax rate linked to a 5 percent growth in state tax revenue collections.
"I have encouraged legislative leaders to still have a growth trigger in there so we can continue to lower the income tax as our economy continues to grow and frankly, as we find ways to eliminate government waste and right-size state government," Fallin said.
Fallin said she did not know what the final cut will be.
"Legislative leaders have talked about getting it under 5 percent, which is better than what we have now, but I was hoping we could do more," she said. "As we continue our budget and tax negotiations, I'm going to push for the biggest and most significant tax cut possible."
Senate Minority Leader Sean Burrage, D-Claremore, said, "First of all, I would just like to welcome the governor to a position that is at least near reality when it comes to tax policy in the state of Oklahoma.
"We have been talking about a reduction and elimination in the state income tax for three months now, and I have never heard anything from the governor's office to say how we are going to pay for these tax cuts."
Fallin's proposal called for eliminating many of the tax credits and exemptions.
"There have been several bills out here that talk about paying for the tax cuts by cutting tax credits and exemptions," Burrage said. "They seem to be sputtering out. As it turns out, these tax credits and exemptions have very powerful lobbyists in this building."
Senate President Pro Tem Brian Bingman, R-Sapulpa, said the state will have to fund critical reforms within the Department of Human Services. Those reforms come with a price tag that will be significant, he said.
"We know natural gas prices have plummeted to a 10-year low, and as a result, our state revenue projections could be significantly impacted," Bingman said. "While we will not slash state agency budgets as other states like Wyoming plan to do in response to falling natural gas prices, I remain concerned about the potential impact and domino effect depressed gross production tax collections could have on drilling and jobs across Oklahoma."
Possible state income tax cut
Where it stands: A conference committee made up of members of the House and Senate is expected to work out a compromise tax bill over the next three weeks. The tax bill will have to be in place before a budget can be approved, which must be done before mandatory adjournment May 25.
Original Print Headline: Fallin: Tax cut plan will not be passed as proposed
Barbara Hoberock 405-528-2465
Oklahoma Gov. Mary Fallin