A proposal to cut the state's top personal income tax rate by more than half and eventually eliminate it won't be a priority again next year by a conservative think tank, which made it the centerpiece of its legislative agenda this year, a policy impact director with the group said Wednesday.
“We'll leave that proposal as it is, but we'll be spending most of our time in our efforts advocating for other OCPA priorities, including workers' compensation reform, pension reform,” said Tina Dzurisin after discussing tax changes in a debate sponsored by the Oklahoma Institute for Child Advocacy.
“Our priority has shifted. We just think that there are more common-sense reforms that we can make in other areas that will strengthen Oklahoma's economy and make us more competitive without expending so much energy on a proposal that the Legislature didn't feel like they were quite ready to put through.”
The Oklahoma Council of Public Affairs last year worked with Arthur Laffer, an economist who first gained prominence as a member of former President Ronald Reagan's economic policy advisory board, in developing the income tax-cutting plan.
The proposal, which sought to cut the state's top personal income tax rate of 5.25 percent by 3 percentage points next year down to 2.25 percent, was included in legislation that eventually was scaled down. It and four other measures seeking to cut the personal income tax failed to pass.
One of the other major tax bills contained an income tax-cutting proposal by Gov. Mary Fallin, who is developing her legislative agenda for next year.
“The governor is going to continue to push for lower taxes of some kind,” said Alex Weintz, the governor's communications spokesman. “It will not be identical to her tax plan last year. The governor has always said when she campaigned for office and when she got into office that she thinks that lower taxes will lead to greater growth that will create more jobs.
“We want to make sure that we listen to legislators and listen to our constituents, but we think that the people of Oklahoma and the Legislature continue to support lower taxes,” Weintz said.
David Blatt, director of the Oklahoma Policy Institute, which promotes fair funding of state government services, spoke Wednesday against reducing the personal income tax rate. Blatt was among those leading the charge last session opposing income tax-cutting proposals. He said doing away with broad-based tax benefits, such as the personal exemption, earned income tax credit and sales tax relief credit, hit the poor and middle-class families and called it the wrong approach to lower the top personal income tax rate.
“We still think tax cuts are the wrong priority when we continue to fall short of funding schools and services to those with disabilities and mental health issues,” Blatt said. “It's not going to be the path to lift more people into the middle class and make our state more prosperous.”