Oklahoma legislature nears budget agreement; officials agree tax cut will have to be paid for with spending cuts or savings
BY BARBARA HOBEROCK World Capitol Bureau
Friday, May 04, 2012
5/04/12 at 7:25 AM
OKLAHOMA CITY - The House and Senate are close on reaching an agreement on a fiscal year 2013 budget, Senate Majority Floor Leader Mike Schulz said Thursday.
Lawmakers have three weeks left in the legislative session that began in February.
"It's that time of year when things get interesting," Schulz said.
The House and Senate are having regular meetings to discuss the fiscal year 2013 budget, Schulz, R-Altus, said.
"I believe the House and Senate are close in agreeing what that budget number is going to be and then it will be a matter of sitting down the folks on the second floor (Gov. Mary Fallin's office) and bringing them into the discussion as well," Schulz said.
Concerns about the low cost of natural gas are playing a role in decisions about how big of an income tax cut will be agreed upon, Schulz said. The state's top rate is currently 5.25 percent.
"There has been some uncertainty created in the last couple of weeks centered around natural gas that wasn't there two months ago," Schulz said.
Efforts to eliminate tax credits, exemptions and deductions appear to have gained little traction. Those elements are needed to help pay for a reduction in the state's income tax rate.
Schulz said lawmakers agree with State Treasurer Ken Miller, former chairman of the House Appropriations and Budget Committee, that a tax cut will have to be paid for in advance. Miller has said that for every $1 cut in the income tax, an equal amount must be derived from spending cuts or savings.
"I think that is the prevailing attitude on both sides of the fourth floor that we are not going to just cut taxes for the sake of cutting taxes," Schulz said. "We are going to be responsible and accountable if there is an income tax reduction coming to make sure we don't create holes in the budget, and not just holes in this budget year, but holes that would be created in future budget years."
House Speaker Kris Steele, R-Shawnee, said the state will have between $200 million and $300 million more in fiscal year 2013 than it did in the current fiscal year.
"We feel like instead of growing the budget, we ought to give that money back to taxpayers of Oklahoma through tax relief," Steele said.
Lawmakers have not agreed on whether future reductions to the state income tax will be tied to revenue growth in the form of a trigger, Steele said.
"That is something we are discussing," Steele said. "I can't tell you yes or no at this point."
Meanwhile, the Oklahoma chapter of Americans for Prosperity is sponsoring pre-recorded phone calls to residents featuring former Gov. Frank Keating encouraging them to contact lawmakers and urge the reduction and eventual end of the income tax, said Stuart Jolly, state director.
With the GOP's majority in the Legislature and control of the governor's office, failure to act would be a travesty, Jolly said.
Original Print Headline: Budget agreement close, says lawmaker
Barbara Hoberock 405-528-2465
Mike Schulz: "I think that is the prevailing attitude on both sides of the fourth floor that we are not going to just cut taxes for the sake of cutting taxes."