GOP leaders support Oklahoma income tax cut

Gov.-elect Mary Fallin, House Speaker-elect Kris Steele and Senate President Pro Tem-elect Brian Bingman, all Republicans, said they support enacting a mechanism that is scheduled to reduce the state's top income tax rate from 5.5 percent to 5.25 percent in 2012.

The state Board of Equalization voted 6-1 Tuesday to accept preliminary revenue estimates which will trigger the automatic reduction in the income tax rate under existing law.

Legislation passed a few years ago requires that if state revenue increases by 4 percent and other conditions are met, the state's top income tax rate will drop to 5.25 percent.

Attorney General Drew Edmondson was the only dissenter on the board, saying it's too early to reduce revenue for the state because it is still attempting to recover from the recession.

“Having that trigger take effect before we're fully out of the recession is a bad idea,” Edmondson said. “It's bad economics and bad government, and it's particularly bad when it's based on an estimate and not on an actual growth rate of 4 percent.”

The board will take formal action on approving the tax cut at its next meeting in February. During that meeting, the board will certify how much money legislators will have to spend next year based on revenue estimates prepared by the Oklahoma Tax Commission. The board, made up of several elected officials, will be entirely different at that meeting as Republicans succeed Democrats who either didn't seek re-election or lost election bids last month.

Gov. Brad Henry, presiding the last time as Equalization Board chairman, negotiated the tax-cut trigger as part of a 2006 tax cut compromise.

“That's part of a deal that I cut four years ago, and I stand by it,” said Henry, who could not seek re-election because of term limits. “Frankly, there's a good argument to be made that lowering taxes during tough economic times … will help stimulate the economy.”

Single taxpayers and those who are married but file separately whose annual income is at least $8,700 are in the state's top income tax rate and would be eligible for the income tax reductions in 2012, according to the Tax Commission. Those married who file jointly must earn at least $15,000 a year to be in the state's top income tax rate.