ONE sign that the end of the legislative session is near: the theatrics escalate. This week's Senate Republican news conference provides proof positive.
Senate GOPers announced a plan to cut Oklahoma's income tax a half-point over two years, lowering the rate to 5 percent and then to 4.75 percent. They would offset the cuts with changes to tax credits and incentives.
The average Oklahoman might not notice the cuts because changes to the personal exemption and other breaks may largely offset the initial lower rate. Furthermore, the plan actually predicts increased tax collections for the first two years.
State Sen. Mike Mazzei, R-Tulsa, said review of the tax code uncovered “millions and millions of dollars of special-tax deals, loopholes, that don't really grow long-term, high-paying jobs.” But the big-ticket items the Senate targets for elimination are mostly tilted toward low-income Oklahomans rather than “corporate welfare” recipients.
Mazzei complained that a competing House plan would require “budget shaving” and leave a “gaping hole” in the fiscal year 2014 budget. But the Senate plan reduces revenue by $76 million in FY '15. And given their campaign promises, it's odd to hear a Republican complain a tax cut would reduce government revenue and spending.
A Senate handout listed the revenue impact of the proposed tax changes, but Mazzei was forced to admit that the figures were outdated, saying, “Those numbers do not show the actual decrease in the incentives.”
So this was a hastily announced tax cut plan that could actually increase government revenue in the short term, based on possibly false numbers. Great!
Regardless of the political theater, it appears Gov. Mary Fallin and House and Senate leaders are not that far apart. Now that Kansas has slashed its income tax to 4.9 percent, that rate appears to be the governor's immediate goal to ensure Oklahoma remains competitive. House leaders support an immediate cut to 4.95 percent, while the Senate now supports 5 percent.
The Senate opposes “triggers” that automatically cut taxes in future years as state revenue grows, while others propose using triggers to gradually cut the rate as low as 4.25 percent and ensure a portion of future growth is returned to taxpayers.
House officials want to use growth revenue to pay for this year's tax cut. The Senate prefers tax code reform. We suspect a combination of the two approaches will occur. The Senate deserves credit for touting tax reform, even if some suspect it was a political stunt.
In spite of the harsh rhetoric, the differences appear easily surmountable.
No doubt, this year's state budget will include its share of flimflam regardless of which plan is adopted. There will be items we oppose or find ridiculous. But we remain hopeful the net result of negotiations will be more positive than negative.
The goal of budget writers should be to fund the true core functions of government while advancing policy that makes Oklahoma a place where businesses grow and citizens prosper — not to win a sound-bite war.