OKLAHOMA CITY — A Senate-backed plan to delay cutting the state's top personal income tax rate until 2015 appeared to be gaining traction in the Oklahoma Legislature on Thursday, with House Speaker T.W. Shannon and a spokesman for Gov. Mary Fallin both indicating they would be open to pushing it back.
Shannon also told reporters he was willing to consider changes to some of the millions of dollars in tax credits and deductions as part of negotiations on a cut to the tax rate.
"We've certainly got a lot of reform needed in the area of tax credits," said Shannon, R-Lawton.
Shannon and Fallin had both endorsed a plan to reduce Oklahoma's top personal income tax rate from 5.25 percent to 5 percent, effective Jan. 1, but that bill was gutted in the Senate. The upper chamber replaced the plan with one to drop the top rate to 4.95 percent, effective Jan. 1, 2015, and eliminate the transferability of five separate tax credits.
Shannon said last week, when the Senate version first materialized, that he thought a delay until 2015 would be a "travesty" but indicated Thursday he would be willing to extend the effective date if it meant a deeper cut.
"If we do delay it, I wouldn't close the door on that, but it will need to be a deeper tax cut so that we don't lose the savings that we would realize, so we don't lose the economic jump that we get from cutting taxes," Shannon said.
Fallin spokesman Alex Weintz said Thursday the governor would prefer an immediate tax cut, but added that the details were negotiable.
"Her priority is to have an income tax cut bill signed into law this year," Weintz said. "In terms of the actual size of the tax cut, when it would go into effect, those are all negotiable and things we are negotiating with the House and Senate."
"Obviously her preference is to have an immediate tax cut of .25 percent. That's what she proposed in her executive budget, but we know there are other ideas and voices out there, and we're listening to them."
Senate President Pro Tem Brian Bingman said delaying the tax cut would free revenue for the upcoming fiscal year that could be used for other spending priorities, including needed repairs to the state Capitol. Bingman, R-Sapulpa, said all three sides were "trying to find some agreement, some tax credits we can all agree upon, making a responsible tax cut and taking care some of the needs that are important today, that being the state Capitol."
Bingman and Shannon also said the House, Senate and governor's office were nearing an agreement on a supplemental funding bill that would provide money to pay for an increase in costs of teacher benefits and $8 million to begin renovations to the facade of the Capitol, where chunks of limestone and mortar have fallen from the building.
Bingman and Fallin also want $2 million to fund an in-depth architectural and design study of the Capitol's infrastructure needs, but Shannon said he thought the $2 million price tag seemed excessive.