Gov. Mary Fallin said Tuesday the additional $47 million lawmakers will have available to appropriate this year should go toward reducing the state's personal income tax rate.
“The best way to continue our prosperity and ensure Oklahoma remains economically competitive is to return this money to families in the form of an across-the-board tax cut rather than pursuing more government bureaucracy,” she said.
Fallin and other members of a state budget board approved a final spending amount that legislators will use to prepare the budget for the 2013 fiscal year, which begins July 1.
The increased revenue comes mostly from higher than expected income tax and sales tax collections, state finance officials said.
Members of the state Equalization Board, made up of several elected officials, approved the latest and final estimate from the Oklahoma Tax Commission on state revenue expectations for the 2013 fiscal year.
The revised budget is nearly $6.6 billion, or $168 million, or 2.6 percent, more than lawmakers had available to spend a year ago.
Fallin, the board's chairman, said the improved showing by the state, which two years ago was facing revenue shortfalls, is an indication it's time to reduce the state's personal income tax rate.
“While it's great news that the state has more revenue than expected, it should not be seen as an excuse to increase government bureaucracy or to go on a spending spree,” she said. “It's important we continue to pursue policies to ‘right-size' government and to save taxpayer dollars through increased efficiencies and government modernizations.
“It's not time to let up on looking for ways to save money,” the governor said.
Senate chief agrees
Senate President Pro Tem Brian Bingman said he agreed with Fallin and that lawmakers must be good stewards of the taxpayers' money.
“We simply cannot afford to celebrate our success by making government bigger,” said Bingman, R-Sapulpa. “Instead, we should seize our momentum to cut taxes for hardworking Oklahomans while redoubling our efforts to thoughtfully target what we must spend on essential services — improving teaching in the classroom, fixing our broken roads, and making our communities safe places to live and raise our families.”
Fallin has proposed reducing the personal income tax from 5.25 percent rate to 3.5 percent next year, and reducing the number of income tax brackets from seven to three; individuals earning less than $15,000 would not be required to pay personal income taxes. Further cuts in the income tax rate would be cut by an additional quarter point in any year in which the state sees 5 percent revenue growth.
Fallin said her proposal will be placed in a bill next week. Several other proposals to reduce the income tax have been filed by lawmakers.
“That's what the legislative process is about,” she said. “Hopefully, this year we can find a way to lower our income tax but also provide for core essential services in state government.”
Formula for estimates
State Treasurer Ken Miller, who also serves on the Board of Equalization, said declining natural gas prices are a worry. The Tax Commission lowered its natural gas estimate from $4 per 1,000 cubic feet to $3.64 per 1,000 cubic feet, but Miller said he's been told by energy company officials that the price may stay about $2.50 per 1,000 cubic feet for the next year or so. Natural gas closed Tuesday at $2.63 per 1,000 cubic feet.
Get A Chance to Earn £87/h - start today! Make Money 30 mins from now!