Majority of Oklahomans would owe less under income-tax proposal
BY BARBARA HOBEROCK World Capitol Bureau
Saturday, May 19, 2012
5/19/12 at 7:44 AM
OKLAHOMA CITY - About 54 percent of Oklahomans would owe less next year under a recently announced tax-cutting proposal, figures released Friday show.
About 21 percent of taxpayers would see no change, and about 24 percent would see an increase, according to figures compiled by the Oklahoma Tax Commission and released by the Oklahoma House of Representatives.
The average reduction in taxes would be $60 in tax year 2013 and $69 in 2014.
The House General Conference Committee on Appropriations on Friday passed House Bill 3061, which outlines a tax-cutting proposal announced late Thursday by Gov. Mary Fallin and Republican legislative leaders.
"This proposal represents a significant income tax cut and an important step forward for Oklahoma," Fallin said Thursday in a press release announcing the plan.
Alex Weintz, a Fallin spokesman, said the savings will be significant to most families, especially with the economy coming out of a recession.
The proposal would reduce the state's top income tax rate to 4.8 percent for tax years 2013 and 2014. The top rate is currently 5.25 percent.
An additional cut of 0.3 percent would occur in tax year 2015 if the state saw 5 percent growth in five revenue categories: personal income, use, motor vehicle, sales and corporate taxes.
The measure would be paid for with growth revenue and the elimination of 33 tax credits, among other things, said House Speaker Kris Steele, R-Shawnee.
The state is going to have $350 million more in revenue than originally expected, Steele said.
The measure would retain the full personal exemption of $1,000 per dependent for individuals making $35,000 or less in adjusted gross income and joint filers earning $70,000 or less. The measure would eliminate the exemption for residents with incomes above those levels. It also reduces the state's tax brackets to three from seven.
Rep. David Dank, R-Oklahoma City, called the measure a huge compromise that has been in the works for months.
Rep. Joe Dorman, D-Rush Springs, said the measure will increase taxes on those who can least afford it. He said the measure runs counter to State Question 640, which voters approved in 1992. SQ 640 requires that tax increases receive three-fourths support in the House and the Senate, or go to a vote of the people.
"The intention is honorable," Dorman said. "But it does raise taxes on a significant number of people. I think we should go back to the table and come up with something that benefits all Oklahomans."
Lawmakers are playing a shell game, Dorman said, with a measure lowering taxes for the rich and increasing the burden on working-class Oklahomans to keep election-year promises.
Steele said he didn't think the proposal ran counter to SQ 640.
"This represents a net tax decrease," he said.
While some may not get as much back in their refunds, they will not be paying more, the speaker said.
John Estus, a Steele spokesman, said the measure will be voted on by the Senate General Conference Committee on Appropriations. If it passes there, the House will likely hear it on Tuesday, he said.
Budget announcement may come Monday
Lawmakers and Gov. Mary Fallin hope to announce a budget on Monday, said Alex Weintz, a spokesman for the governor.
Lawmakers and the governor's office continued budget negotiations Friday.
On Thursday, Fallin and Republican lawmakers announced a joint tax-cutting agreement following weeks of negotiations.
An agreement on a tax cut had to be worked out before lawmakers and Fallin's office could craft a budget for fiscal year 2013.
Lawmakers must adjourn by 5 p.m. Friday.
- Barbara Hoberock, World Capitol Bureau
Original Print Headline: Proposal would cut taxes for majority
Barbara Hoberock 405-528-2465
Gov. Mary Fallin: "This proposal represents a significant income tax cut and an important step forward for Oklahoma."