Her proposal will be sent to Legislature
on first day of session
OKLAHOMA CITY (AP) — Gov. Mary Fallin said Wednesday she would outline plans for an income tax cut during next month’s State of the State speech, despite a projected $170 million revenue shortfall next fiscal year.
Fallin, a Republican, said the details of the tax cut still were being worked out but would be included in her executive budget to be presented to lawmakers Feb. 3, the start of the legislative session.
“You will see me propose a tax cut that we believe is affordable for our state,” Fallin said.
As the governor, Fallin must present a balanced budget based on about $6.96 billion in revenues that the state is expected to collect next fiscal year. That’s about $170 million less than the Legislature appropriated to state programs in this year’s budget. A final certification of the projected available revenue will be made next month.
Fallin suggested that at least some of the lost revenue will be offset in her proposed budget with targeted cuts to agency budgets or state programs.
A cut in the state’s income tax has been an elusive goal for Fallin. Her first proposal in 2012 to deeply cut the rate and offset the lost revenue with the elimination of dozens of tax credits and deductions fell apart amid resistance from lobbyists who fought to keep many of the tax exemptions. Then an agreement among GOP leaders last year to cut the rate from 5.25 percent to 5 percent, beginning in 2015, was thrown out by the Oklahoma Supreme Court because it included more than one subject, violating a requirement of the state constitution.
It is estimated that a 0.25 percent cut in the state’s income tax rate would cost the state about $120 million annually.
David Blatt, the head of a think tank in Tulsa that advocates for increased funding for state services, said plans to push for a tax cut amid a projected $170 million budget hole is fiscally irresponsible.
Both House Speaker T.W. Shannon and Senate President Pro Tem Brian Bingman have signaled their willingness to support a tax cut this year.