Last updated: April 24. 2014 10:01AM - 422 Views
TIM TALLEY Associated Press



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OKLAHOMA CITY (AP) — Legislation that would trim Oklahoma’s personal income tax rate when state revenue improves was approved by the House on Wednesday in spite of objections that it’s irresponsible in the face of critical education, health care and transportation needs.


House members voted 54-40 for the Senate-passed measure that is one of the session’s top priorities for Republican Gov. Mary Fallin, who is seeking re-election. It now goes to Fallin to be signed into law.


Opponents of the measure say it’ll be harder to pay for important state services, with Rep. Joe Dorman of Rush Springs, a Democrat running for governor, saying “It’s unacceptable we’re doing this. We need to pay our bills.”


Following the measure’s passage, House Speaker Jeff Hickman, R-Fairview, said the measure lowers the tax burden while making sure there is sufficient monetary growth to fund core government services. Supporters also say it’ll let workers to keep more of their paychecks and help stimulate the economy.


The measure will reduce the personal income tax rate from 5.25 percent to 5 percent in 2016 if state revenue projections are more than expected in December 2014. A second reduction from 5 percent to 4.85 percent will occur no sooner than two years after the 5 percent rate is enacted, providing there’s enough money to cover the cost of the reduction.


The Oklahoma Tax Commission estimates that if the cuts are fully implemented by 2018, income tax revenue will be cut by almost $200 million a year.


Oklahoma’s current 5.25 percent income tax rate is the 22nd lowest among states that have an individual income tax, according to the Tax Foundation, an independent tax policy research organization.


The state’s income tax has been cut several times over the past decade form an original top rate of 7 percent and state revenue has increased after each cut, said bill author Rep. Leslie Osborn, R-Mustang.


“It’s not our money. It’s the citizens of Oklahoma’s money,” he said. “We are doing better than almost every state in the nation.”


But opponents say it’s a mistake to cut taxes when the state already faces a revenue shortfall of $188 million.


“Why do we keep digging a hole?” said Rep. Mike Brown, D-Tahlequah.


They also argue that the tax cut benefits only the wealthiest Oklahomans. Rep. James Lockhart, D-Heavener, said the tax cut will save average Oklahomans only $8 a month.


“Are we helping the people that really need it?” said Lockhart, who held up some tattered books that he said were his daughter’s 10-year-old public school textbooks.


Thousands of teachers rallied at the state Capitol on March 31 demanding more tax dollars for classrooms and teacher salaries. Educators have said state education spending is $200 million lower than it was five years ago.


“This is wrong what we’re doing. Working Oklahomans are struggling,” he said.


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