Gov. Mary Fallin and legislative leaders announced agreements Tuesday on three key issues, which include reducing the state's top personal income tax rate in the 2015 calendar year and a further reduction if state tax revenues don't dip.
Other key agreements were reached on overhauling the Oklahoma workers' compensation system and developing a plan for the state to sell unneeded property and underused buildings and to develop an eight-year plan on the needs of state buildings.
All three bills will be submitted to lawmakers by Thursday's deadline to get most Senate measures out of the House and most House measures acted on by the Senate.
House Speaker T.W. Shannon, R-Lawton, and Senate President Pro Tem Brian Bingman, R-Sapulpa, said that with approval on these issues by the Republican-controlled Legislature, work would concentrate on developing a $7 billion legislatively appropriated budget for the 2014 fiscal year, which begins July 1. They hinted lawmakers could adjourn by May 24, or one week earlier than they are authorized to meet.
The income tax cut plan now calls for lowering the top income tax rate from 5.25 percent to 5 percent on Jan. 1, 2015. The rate would be cut to 4.85 percent on Jan. 1, 2016, if total revenue growth for the state is equal to or greater than the previous fiscal year.
By delaying a cut in the income tax rate, lawmakers will have more funds available to set aside to repair the state Capitol. Fallin said $60 million would be allocated for the 2014 fiscal year and $60 million would be earmarked for the 2015 fiscal year for repairs to the crumbling, nearly 100-year-old building.
Fallin and Shannon proposed a reduction of the top personal income tax rate from 5.25 percent to 5 percent, effective Jan. 1. Senate Republicans rewrote the proposal and called for reducing the top personal income tax rate to 4.95 percent, taking effect in 2015. It also ends the practice of five popular economic tax credits being sold to others who need to reduce their income tax liability to the state.
The latest income tax agreement does not involve tax credits, but Bingman said changes to some tax credits would be pursued in other legislation.
Senate 1062 still would change Oklahoma's workers' compensation from a judicial system to an administrative one. It still includes language that would allow certain businesses to opt out of the workers' compensation system as long as they provide equivalent benefits to injured workers.