Legislative leaders in Oklahoma urge caution in reducing or eliminating state personal income tax rate

Most people don't like the income tax and want to see it eliminated, but “we need to look at this very calmly,” Senate President Pro Tem Bingman said during the chamber's annual legislative breakfast.

“We should take a methodical, logical approach, a systematic approach,” House Speaker Kris Steele said. Steele, R-Shawnee, and Bingman, R-Sapulpa, both said they welcome a thorough discussion on various proposals to reduce the income tax rate during this year's session, which starts Feb. 6 and runs through late May.

Some proposals call for the personal income tax's gradual elimination, but the GOP legislative leaders said they want to make sure reducing that stream of revenue won't harm the funding of core governmental services such as transportation, education, health and human services and public safety.

House Minority Leader Scott Inman, D-Del City, said the income tax makes up about one third of the state's revenue and reducing it further or eliminating it would jeopardize some core services.

“No business wants to come to a state where the roads and bridges have potholes on them,” he said. “No business wants to come to a state where their children of their employees can't get a good public education.”

Most state services have been cut by 20 percent in the past three years as Oklahoma has seen its revenues decline because of the national recession and low natural gas prices, he said.

Lawmakers appropriated $6.4 billion this fiscal year, which started July 1; about $1.9 billion is to come from personal income taxes. The top rate for the state income tax is 5.25 percent, down from 6.65 percent eight years ago.

Inman said he is concerned one proposal that calls for reducing the rate by a half percent over the next two years could mean an increase in taxes for middle-income families; a family of four earning $40,000 a year would have to pay $615 more in taxes, he said.

“We need to be very careful and very thoughtful,” said Senate Minority Leader Sean Burrage, D-Claremore.