OKLAHOMA CITY (AP) — A plan backed by Gov. Mary Fallin to slash the state's top personal income tax rate easily cleared the Republican-controlled Oklahoma House on Tuesday over the objection of Democrats who argued it would take funding from critical state services.
The House voted 65-30 for the bill by House Speaker T.W. Shannon, R-Lawton, to cut the top rate from 5.25 percent to 5 percent, beginning Jan. 1. The bill now heads to the Senate for consideration.
"I'm not asking you to take a big leap. I'm asking you to take a small step," said Rep. Scott Martin, the chairman of the House Appropriations Committee who answered questions about the bill for Shannon during discussion on the floor.
The bill passed Tuesday would cost the state about $50 million in the upcoming fiscal year that begins July 1 and $130 million when fully implemented in fiscal year 2015, according to a House analysis.
Democrats argued the bill would save the average Oklahoma taxpayer about $7 per month but take revenue from key government functions like education, transportation and public safety.
"At the end of the day, this bill will save the average Oklahoma family $7.29 each month. Will that really stimulate our economy?" said Rep. James Lockhart, D-Heavener. "It just doesn't make sense."
The Senate approved a separate measure Monday to cut the rate to 4.75 percent and offset much of the lost revenue with the elimination of exemptions and deductions. Leaders in the House and Senate are expected to negotiate with the governor's office on a final version of the bill.
The House also approved a separate measure late Tuesday to eliminate the state's franchise tax on businesses, which is expected to cost the state about $40 million annually.