Oklahoma House introduces new personal income tax-cutting proposal; Senate balks

Senate won't hear a new House personal income tax-cutting proposal, and the governor wants the House to hear House Bill 3061, an income tax-cutting proposal agreed to last week by her and Republican House and Senate leaders.
BY MICHAEL MCNUTT mmcnutt@opubco.com Modified: May 23, 2012 at 12:46 pm •  Published: May 23, 2012

House Republicans, concerned that a proposed plan to cut the personal income tax would result in some middle-class Oklahoma families having to pay more in taxes, announced a new income tax-cutting plan Wednesday.

The proposal, announced with only three days left in this year's session, ensures Oklahomans receive either an income tax reduction or no tax change at all, House Speaker Kris Steele said.

The earliest the tax reduction plan could take effect would be Jan. 1, 2014.

“We came here to lower taxes for hardworking Oklahomans and we're going to do exactly that with this new plan,” said Steele, R-Shawnee.

Republicans announced the plan after holding a closed-door caucus to discuss the proposal. A scheduled breakfast was scratched with Gov. Mary Fallin, who had been urging House Republicans to get behind a personal income tax-cutting deal brokered between her and legislative leaders last week.

Senate President Pro Tem Brian Bingman said he was disappointed in the House Republicans' decision and urged House GOP leaders to hear the proposed income tax-cutting plan that is contained in House Bill 3061.

“A deal is a deal,” said Bingman, R-Sapulpa.

Steele fired back that House Republicans don't support HB 3061 because it raises taxes.

“House Bill 3061 will not be heard on the floor,” Steele said. “This issue is now at the Senate's doorstep. It's up to the Senate to decide whether a tax cut passes this year.”

Fallin's communications director, Alex Weintz, said the governor has not endorsed any alternative to the tax cut deal agreed to last week.

“She continues to support that plan as originally agreed to and strongly encourages House leadership to put that plan up for a vote today,” Weintz said.

The House GOP plan, to be inserted in HB 3038, proposes three growth triggers that would reduce the top personal income tax rate of 5.25 percent down to 4.5 percent within three to 10 years, depending on revenue growth. In order for the trigger to take effect, there must be a 5 percent annual growth in collections of motor vehicle taxes, use taxes, sales taxes and personal and corporate income taxes.

Steele said there's time to get HB 3038 acted on before lawmakers are to finish their work by 5 p.m. Friday.

The House General Conference Committee on Appropriations is scheduled to take up HB 3038 Wednesday afternoon.

HB 3038 keeps the current tax bracket structure and personal exemption intact.

The tax bracket structure change and personal exemption modification proposed in HB 3061 are among reasons why some taxpayers would have more of a tax burden.

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