OKLAHOMA CITY (AP) — A one-time cut to the state's income tax is not off the table, Gov. Mary Fallin said Wednesday, even as she outlined about $56 million in new funding proposals for mental health programs and Medicaid.
Fallin's proposals, which she discussed at a legislative forum hosted by The Associated Press, drew immediate criticism from top Democrats who said it was hypocritical to call for additional spending while proposing a cut in a key source of state revenue.
"We've got a governor and Republican leadership who aren't making the proper investments in our seniors and in our children," said House Minority Leader Rep. Scott Inman, D-Del City. "To say we can afford to cut hundreds of millions of dollars out of our income tax revenue while openly recognizing the need to care for these folks is hypocritical and misguided."
Fallin said she will urge lawmakers to consider a one-time cut in the state's top income tax rate of 5.25 percent — without losing exemptions or deductions — when the Legislature convenes on Feb. 4. Unlike a sweeping proposal she unveiled during last year's State of the State address, Fallin said this year's plan would be simple and modest, although she declined to give specifics.
"I am committed to continuing to gradually reduce our income tax rate in the state of Oklahoma at a rate that we can afford and still provide essential services," she said.
New House Speaker T.W. Shannon, R-Lawton, and Senate President Pro Tem Brian Bingman, R-Sapulpa, both said they would endorse a balanced tax-cut proposal, but stressed the need to consider eliminating some of various tax credits and deductions that cost the state millions of dollars each year.
"It (a tax cut) has to be done with a balance and a need for core government services," Shannon said.
A cut of about one-quarter of 1 percent to the state income tax rate equates to a loss of roughly $120 million annually once fully implemented, state finance officials have said. But Fallin said that revenue would ultimately be offset by growth in the economy that results from a lower tax burden.