In spite of a massive budget shortfall for this legislative session, the Oklahoma House of Representatives voted 85-13 to further reduce the state income tax rate.
SB 315 would reduce the top individual income tax rate from 5.5 percent to 4 percent beginning in January 2010. Initially, the bill would have lowered the top rate from 5.5 percent to 5.25 percent at a cost of $114 million each year. Rep. Mike Reynolds amended the bill to lower the tax to 4 percent at an annual cost of $600 million.
“Recently, tax cuts have become the political game at the Capitol,” said OPEA Executive Director Sterling Zearley. “If a tax cut bill hits the floor, legislators are afraid to vote no, because opponents will use that vote against them in the next election. Legislators should pay our state’s bills and stop playing games with critical services.”
The state is facing a revenue shortfall of $900 million for FY 2010. If SB 315 is allowed to become law, the hole will deepen significantly. The bill now moves to a conference committee for final discussion before its last journey through the Senate and House.
Since 2004, state leaders have been on a tax cut binge, which will result in reduced state revenues of $777 million FY 2010. The revenues from these tax cuts would have gone a long way to filling the budget gap.
Already Oklahoma is a low tax state, ranking 46th in state and local government spending. Oklahoma spends $5,841 per person on state and local government. The national average is $7,124.
“The people of Oklahoma want good government services, not meaningless tax cuts,” concluded Zearley. “Tax revenues are used to provide basic services including, ensuring safety of our food and water supply, keeping dangerous felons locked away, and providing safe roads and bridges. Our leaders are shortchanging citizens by continuing to cut taxes and not investing in these important services that ensure quality of life for all Oklahomans.”
Posted on
Fri, April 24, 2009
by Trish Frazier